Business

Lord Grocott: My Lords, just before we start the Second Reading, perhaps I may make a suggestion about timing. We have quite a bit of business today, and we have a target rising time of four o'clock. We should meet that comfortably if the Back Bench contributions on the first debate were restricted to about 10 minutes.

Interception of Communications (Admissibility of Evidence) Bill [HL]

Lord Lloyd of Berwick: My Lords, I beg to move that this Bill be now read a second time. The purpose of this short Bill is to enable intercept evidence to be given in court subject to adequate safeguards. Those safeguards are set out in the Bill in Clause 1 subsections (3) and (4) and Clause 2.
	Intercept evidence, as I am sure all your Lordships are aware, is of great importance in identifying criminals—both terrorists and those engaged in other forms of serious crime, in particular those engaged in the importation of drugs. We could not do without it. But although the use of intercept evidence to identify criminals is well established, we do not permit that same evidence, however compelling it may be, to be used to bring those criminals to trial. That is the effect of Section 17 of the Regulation of Investigatory Powers Act. I emphasise that the Bill is not limited to terrorism but also covers all forms of serious crime. In the case of terrorism, if there is no other evidence against the suspected terrorist, or the other evidence is weak, it will mean either that he has to be detained indefinitely as was done in the case of the Belmarsh detainees—happily that will no longer be possible—or alternatively he has to be released without charge. I have never regarded that as making sense, and I know that view is shared by many others. Recently, there has been a groundswell of opinion that we should look again at Section 17 of RIPA, to see if anything can be done. That is what I am asking your Lordships to do in this Bill.
	As recently as 20 July 2005, after the terrible events of 7 July, the Prime Minister said in answer to a question from Mr Howard:
	"I am very happy to go back and consult the security services and the police about that. My own view has always been that if we possibly can use intercept evidence, we should, because of the obvious value that it can provide in certain cases. The difficulty is that, up to now, we have been advised by the security services that the disadvantages outweigh the benefits. However, in the light of what has happened, it is obviously sensible to go back and consult them again. It is not an issue on which there is an objection of principle to using such evidence. On the contrary, as a matter of principle, I would prefer to use it rather than not use it, but we have to take account of our advice".—[Official Report, Commons, 20/7/05; col. 1246.]
	I find that answer encouraging; the Prime Minister has not closed the door. The question is whether there is some way in which we can open that door a little wider—or perhaps it would be more accurate to say that we should take a look behind that door—to see if there is some way in which the security services might be willing to allow their evidence to be tested. There is a way in which we can go ahead and do that, which is why if the Bill gets a Second Reading I hope that it will be referred to a Select Committee of this House for investigation and for report. A Select Committee of Members of this House covering the three related fields of intelligence, law enforcement and the criminal justice system would be the ideal forum to investigate the evidence both for and against Section 17 of RIPA, and I hope that it would come to some agreed view. The House is rich in experts in all those three fields. Some of the evidence would no doubt have to be given in closed session, but I understand that there would be no difficulty about that.
	Whether we should have a Select Committee is, of course, a matter in the first instance for the Liaison Committee. At the end of last term I made an application before the Liaison Committee. It saw the importance of the subject, but said that it would defer the decision until the autumn to see if there was anything in the proposed Government legislation on this topic. Unfortunately, there is not. So if the Bill is given a Second Reading, I propose to go back to the Liaison Committee in the hope of persuading it that a Select Committee is the best way ahead.
	What are the reasons for admitting the evidence? The main reason is the obvious one—that it will enable the conviction of some serious criminals who would otherwise escape justice. That is now common ground because of the conclusion of the most recent report of a Home Office review on this subject—the fifth in the past 10 years. The Statement made by the Home Secretary on 26 January included the comment that the evidential use of intercept would be likely to help to convict some serious criminals. Of course, no one suggests that intercept evidence will be of value in every case or even in a majority of cases. But clearly it will be of some use in some cases. It is true that Mr Clarke went on to say that it would be unlikely to be of use in terrorism cases. I was puzzled by that, and I asked to see a copy of the confidential report in which the reasoning was set out. There is no intrinsic difference between a conspiracy to commit a terrorist act and a conspiracy to import drugs. I could not find in the report any justification for the view that it would not be of use in the future in terrorist cases. But clearly that matter could be investigated by a Select Committee, if such a committee were set up.
	There is another consideration which points in the same direction. We are the only country in the world, except Ireland, which does not admit intercept evidence. Why, one asks, would all the other countries take the risk of admitting such evidence—if there is a risk involved—unless there is a corresponding benefit? It is said that our system in the United Kingdom is in some way unique—that there is a uniquely close relationship between the intelligence and law enforcement agencies. But our criminal justice system is exactly the same as that in the United States and Australia, where over the past 20 years or more they have found no difficulty in admitting such evidence. They get great value from it. In support of that, perhaps I may quote the views expressed earlier this year by the Federal Director of Public Prosecutions in Australia:
	"We rarely now have a drug importation prosecution that does not have telephone intercept evidence in it. I can think of any number of prosecutions where we would have real difficulty in prosecuting without it—we just would not get the evidence".
	That view is borne out by Sir David Calvert-Smith, who was the Director of Public Prosecutions in England and Wales. He described the ban on intercept evidence as,
	"a damaging restriction . . . weakening Britain's fight against organised crime, drug trafficking and terrorism".
	He said that the admission of phone taps would assist enormously.
	Sir Ian Blair is of the same view. He said:
	"I have long been in favour of intercept evidence being used in court. In policing terms, it would make my job much easier. The simple reason why it would be better is that if we've got this, we can put it in front of a court and the court can weigh it up".
	Finally, and perhaps most importantly, I refer to the views of the Newton committee. It sums up the arguments both for and against the admission of evidence in court and then says in very measured terms:
	"We understand the concerns of the intelligence and security services, which include not only the protection of sources and methods but also the need to ensure that interception for intelligence purposes is not impeded by the imposition of complex procedures to meet evidential requirements. We recognise that a balance has to be struck between the public interest in prosecuting particular cases and the public interest in maintaining the effectiveness of intelligence gathering techniques and capabilities. We consider, however, that the balance has not been struck in the right place if intercepted communications can never be used evidentially".
	I suggest that those extracts—I could quote many more—make a very strong case in favour of admitting intercept evidence unless there is some insuperable objection.
	I know that the intelligence services have great concerns about this matter—I do not underestimate them for one moment. The thought of intercept evidence being used in court makes shivers run down their spines. We shall, I know, hear from the noble Baroness, Lady Ramsay, who is to speak next. I have to be very careful in her presence because all I ever learnt about investigation and interception techniques at the more sophisticated end at GCHQ, I learnt at her knee. We shall also hear from the noble Baroness, Lady Park, who also has huge experience in this field.
	It seems to me that there are two ways in which those concerns might be met. First, there are safeguards in the Bill. Only the prosecution can apply to introduce evidence; the defence cannot do so. There will be no access to intercept material at all unless the prosecution has applied and the judge has agreed. If some of the evidence has to be excluded on grounds of public interest, it will always be open to the Secretary of State to issue a public interest immunity certificate. Those are methods which could be investigated in a Select Committee, and they are matters which I am sure the noble Lord, Lord Thomas, will want to cover at the end of the debate. He may well suggest improvements to the Bill.
	The other way in which the concerns of the intelligence services could be met would be to change the way in which warrants are issued. At the moment we have a single-tiered system, under which the Secretary of State issues all warrants. But that system could be changed into a two-tier system or even, as is now suggested, a three-tier system. The Home Secretary would continue to issue warrants covering intelligence matters, as he does now, but a judicial authority would issue the evidential warrants.
	At the end of 1999, I attended a Home Office seminar on that subject. It seemed to me that there was a great deal to be said for the two-tier system. It would be much cheaper and would give absolute protection to GCHQ, a matter which concerns the noble Baronesses the most. During the seminar, the only objection I heard was a possible problem in relation to Article 6 of the Human Rights Act in that it might contravene the principle of equality of arms. I read the legal advice, I listened to the arguments and I found them unconvincing.
	Whether intercept evidence should be admissible has been under discussion now for at least 10 years. There is no doubt that it is a subject of importance if, as is now agreed between all the agencies, some serious criminals could be convicted who would otherwise escape justice. The Prime Minister said that he is acting on the advice of the security services and the police. I understand that. But I am not happy that the decision should be taken on the advice of the police and the security services without Parliament having a chance to investigate and to test that advice. I believe that a Select Committee of this House could play an enormously important part in that respect. The security services might even be persuaded that their fears are groundless, but whether they are or not, I do not believe that it is a matter that should be decided on their mere say so. I commend the Bill to the House.
	Moved, That the Bill be now read a second time.—(Lord Lloyd of Berwick.)

Baroness Ramsay of Cartvale: My Lords, I have more than a passing sense of déjà vu about arguing yet again against the use of interception material as evidence in court with the noble and learned Lord, Lord Lloyd of Berwick, in this House, this time in the form of a Bill. He was kind enough to say that I taught him all he knew about interception. All I can say is that I could not have taught him very well because I think he is so wrong about this.
	As of now arguments against such use remain, in my opinion, overwhelming and I speak from a background of considerable professional experience in this somewhat arcane field. I am very concerned at the growing clamour for the use of this material as court evidence in the UK, which in a large part results from a very imperfect picture of what intercept entails, what its use in court would reveal and the loss of intelligence capability that would ensue.
	The whole area of intercept is much wider and much more complex in scope and type of operations than most people can possibly imagine; and fortunately that includes those who are the targets of intercept operations because, again and again, transcripts show people assuming, wrongly, that they are secure in whatever means they are using to communicate. The slightest revelation of interception risks blowing for ever the techniques involved and in some cases putting at risk human agents. It not only means the end of that particular operation but, by extension, others which will be surmised to be in place on similar types of targets.
	The extreme vulnerability of intercept to instant loss if revealed or even hinted at is especially true if the material is encoded or encrypted, where often very sensitive technical means and/or human agents are involved, and the loss of access is usually permanent. It is often said, as the noble and learned Lord did in his introduction, that "other countries use intercept evidence in court, why do not we?". There are actually many reasons for that and I shall touch on just a few.
	First, our very sophisticated and extensive expertise in this field is something of which we can all be very proud, but its very sophistication and scope renders it extremely vulnerable. A straightforward police telephone tap on home national territory would likely have little to lose in terms of giving away techniques or endangering sensitive sources and it is that kind of material alone which some other countries permit to be used in court. In some countries that is the only kind of intercept they actually produce and in those others, where more sophisticated techniques are employed by agencies other than the straightforward law enforcement agencies, it is only the more routine product of the law enforcement agencies' warrants that are produced in court.
	Like the noble and learned Lord, I have also discussed in Australia and Washington what they do and do not use in court. In our country, and this leads to my second point, there is an almost unique—I say "almost", but I believe it is unique—closely interwoven relationship between our intelligence and security services and our law enforcement agencies. It is, therefore, much more difficult to disentangle the various contributions of intercept material than it is where there are clear divisions. To use material from the services—which, as I said, is not done even in countries where they use law enforcement agency transcripts—would endanger very sophisticated techniques as well as agents and entail much greater loss than most people realise.
	Thirdly, our legal system with its adversarial roles for counsel, where defence counsel can roam far and wide at the discretion of the judge, means that defence counsel can range very widely on evidence or with someone in a witness box and that, in the case of intercept material, would pose an absolutely unacceptable risk of exposure. It also means enormous burdens of transcribing and preserving all related interception material if it is to be available for court evidence. That would certainly mean a considerable diminution of product from the services concerned, because of the sheer volume of what would have to be processed and kept. I do not wish to go into more detail than that on that point.
	Countries whose legal systems contain investigative judges or magistrates can manage to handle sensitive material without the risks involved in using it in a British court. Before some noble Lord who is a barrister asks me, as I have been asked before more than once in this House, let me say that I am fully aware of public interest immunity procedures and indeed have had considerable experience of dealing with them in my past life and none of them, in my opinion, provides a satisfactory answer to the points I have raised about the use of intercept material in British courts as envisaged in this Bill.
	A further point of difference in our legal system compared to the countries most quoted as using intercept material in court is that we have no statutory obligation on telecommunication companies to co-operate with the intelligence and security services or law enforcement agencies to facilitate interception. That obviously adds another factor of sensitivity about revealing operations.
	After a previous debate in this House, I received a lengthy letter—some seven A4 pages—from an American law professor who courteously informed me that he had copied his letter to the noble Lords, Lord Thomas of Gresford and Lord Judd. The noble Lord, Lord Thomas, has previously quoted some of the professor's points in debates in this House. I have to say that nothing in that letter affects my position of complete opposition to this Bill.
	I should like to make one other general point. It has been said that there can be nothing in principle against using intercept material as evidence.
	I agree with that statement. This is not a matter of principle; it is a question of practicality and the effect of such a move on the efficiency and productivity of the services and agencies engaged in interception. In my opinion, if a list were to be made of any gains from such a move, as against a list of the losses—in productivity, efficiency and security of sources—then the difference in the lengths of those two lists would lead any sensible person to see that the losses far outweighed the gains.
	On the suggestion for a Select Committee, I have to say that I do not see what a Select Committee would do that the Interception of Communications Commissioner, who is entrusted with precisely this task of looking at how the interception is working and overseeing the agencies which are practising it, is not doing on behalf of the Government, and reporting to Parliament about it.
	I should like to conclude by quoting the present Interception of Communication Commissioner's recently published report for 2004, which I am sorry that the noble and learned Lord, Lord Lloyd of Berwick, did not quote from. In dealing precisely with Section 17 of the Regulation of Investigatory Powers Act 2000, which is the object for amendment in this Bill, the right honourable Sir Swinton Thomas says in paragraph 24:
	"The question of the admission of intercept material in criminal proceedings has been discussed at some length in the course of 2004 between myself and Ministers, the Security and Intelligence Co-ordinator, the security, intelligence and law enforcement agencies and the communication service providers. The aim of all concerned is, of course, to use this material to the best advantage to prevent terrorism and crime, and to apprehend terrorists and criminals. The subject is a complex one, much more complex than at first sight might appear. It is not suitable for lengthy discussion in this Report. I have the considerable advantage in my position of having an overall picture of all those engaged in this work. I am left in no doubt that the balance falls firmly against any change in the present law and that any amendment of Section 17 of the Act would, overall, be damaging to the work of the security, intelligence and law enforcement agencies. I continue, of course, to have an open mind on this subject if any major change should occur in the future".
	I find myself in complete agreement with that paragraph from the Interception of Communication Commissioner's report. I totally oppose this Bill.

Lord Goodhart: My Lords, let me start with the principle that it is plainly wrong if terrorists, drug dealers or people traffickers cannot be convicted because highly persuasive evidence of their guilt cannot be given in court. This means that dangerous people have to be released, or, at best, if they are terrorists, made subject to control orders. Therefore, I believe that there is a burden—and it is not a light burden—on the security services to justify the exclusion of intercept evidence.
	We are not satisfied that the burden has been discharged. There are of course differences of opinion among those who know what goes on. And, why not, at least, as the noble and learned Lord, Lord Lloyd of Berwick, has suggested, set up a committee, whose members will have high-security clearance, which can take evidence in closed hearings, so far as is necessary, and make its report?
	The noble Baroness, Lady Ramsay, made a strong case—and one which I personally find convincing—for saying that there are some circumstances in which the use of intercept evidence would damage national security. But, she accepted, there are also some circumstances, such as the ordinary police phone tap, where the use of intercepts would be of no danger to security.
	I do not propose that intercept evidence should simply be a matter which is generally admissible, subject only to the public interest immunity procedure, as it now exists. I would certainly agree to reasonable steps being taken to prevent damage to national security. We do not want to have anything in the nature of a SIAC procedure here, but I can see no objection to the procedure proposed by the noble and learned Lord, Lord Lloyd, that intercepts should not be disclosed unless the prosecution, who will no doubt have consulted on this with the security services, wishes to use those intercepts.
	Alternatively, it might be possible for the security services, if they want to withhold intercepts which would strengthen the prosecution case, to apply to a security-cleared judge for permission to withhold those intercepts. On such an application it would not be necessary for the defence to be represented, because permission to withhold that interest would benefit the defendant in the particular case, and the reasons for withholding the evidence would be possible prejudice to future investigations.
	Other steps could be taken to minimise the problem. For example, I have had a letter from the Mobile Broadband Group, asking that employees of mobile operators should be allowed to remain anonymous if they are required to give evidence in court about interceptions because of the threats to them personally. That seems to be, to my mind, a reasonable proposition. This is simply an example of many steps which could be taken to protect national security without maintaining the ban on intercept evidence altogether.
	The Bill is topical because in three days' time we will be having the Second Reading debate on the Terrorism Bill. My party has argued that it is important that those who are committing terrorist crimes should be convicted in the ordinary courts of this land, whenever it is possible to do so. Control orders are extremely unsatisfactory alternatives. That is because national security is better protected by convicting terrorists and putting them in prison than by imposing control orders and leaving them outside prison, and also because control orders involve the SIAC procedure, which means that the defendant does not know all the evidence which is relied on by the court against him—something which is inconsistent with the fairness of his trial.
	It is important that these issues get debated during the passage of the Terrorism Bill, and, I believe, debates on amendments to the Terrorism Bill will get a much wider coverage than debates in the course of any future progress of this Bill, which has little chance of succeeding in the other place.
	If amendments are put into the Terrorism Bill by your Lordships' House, it would, at the very least, put the Government under pressure to agree to set up the kind of committee which the noble and learned Lord wants as a price for buying-off those amendments. Therefore, I hope very much that the noble and learned Lord, Lord Lloyd, will put down the provisions of this Bill as an amendment to the Terrorism Bill. If not, it is likely that we will do so ourselves.
	This is an important debate, which is by no means as one-sided as the noble Baroness, Lady Ramsay, suggests. We very strongly support the Bill which the noble and learned Lord, Lord Lloyd, has produced, and we hope that the subject of this Bill will be further considered in your Lordships' House because we believe it to be of great importance.

Lord Ackner: My Lords, it is a matter of great regret to me that I find I am speaking on the opposite side to that of my noble and learned friend Lord Lloyd, for whom I have particular respect. We have known the current Interception Commissioner for many years. He has already been referred to—the right honourable Sir Swinton Thomas—and he is one of the most respected former judges of the Court of Appeal. I have known him for more than 40 years as we were in chambers together. My noble and learned friend Lord Lloyd also knows him well as they are both Benchers of the Inner Temple. Sir Swinton has discussed with both of us his views on the proposal of my noble and learned friend Lord Lloyd, and he is strongly against it. He told us that the communications world and technology have changed out of all recognition in the past 15 years, and have done so in the six years that he has been Interception Commissioner. He told us that in the course of the next couple of years change will be even greater and faster as we move away from telephone to IP, virtually—

Lord Lloyd of Berwick: My Lords, I should tell the House that Sir Swinton Thomas, to whom the noble and learned Lord has just referred, wrote a letter to me in which he set out and expanded the views contained in his published document. I spoke to Sir Swinton this morning and he clearly said that he does not want the views that he expressed in his letter to be made public, directly or indirectly. I understand why he, as an Interception Commissioner, took that line. I hope that the contents of the letter written to me will not be made available to the House in this indirect way, contrary to the wishes of its writer.

Lord Ackner: My Lords, I spoke to Sir Swinton Thomas after—I stress that—he spoke to my noble and learned friend and he is happy for the substance of what he said to be made known to the House. In fact, I believe I have a duty to the House to inform it about what his views are, which my noble and learned friend has refrained from doing. Sir Swinton is the current Interception Commissioner and has made his views fully and strongly known to both of us. I propose to continue from where I was stopped.
	Sir Swinton went on to inform us that whereas it is accepted that it is now virtually impossible to prove that "A" is talking to "B" on a mobile phone, which is what terrorists and criminals use, with IP interception itself will become much more difficult and proof impossible. He told both of us that that renders the Bill sterile. With regard to the extract from his annual report, he again informed us of the nature of the terms of the statement in paragraph 17, which has been read out. He also said that the bland words he used in the statement represent the results of lengthy and painstaking investigations and inquiries, particularly by law enforcement and intelligence agencies. We were both informed that the unanimous conclusion was that the abolition of the exclusion rules would be damaging to their work and, even if the material could be proved, its evidential value would be minimal, if it had any. He added that his view is that the disclosure that is now sought would do untold damage, especially to law enforcement and intelligence, and substantially increase the risk to us all.
	I therefore deemed it essential that this House should know of the harm that this information might result in if it was disclosed. For that reason, and with distinct sadness, I have risen to resist what my noble and learned friend seeks to do.

Lord Robertson of Port Ellen: My Lords, although I intend to speak from my past, not current, experience, I should say, whether relevant or not, that I am deputy chairman of Cable & Wireless, a telecommunications company in the United Kingdom. I am delighted to follow the noble and learned Lord, Lord Ackner, who has made a devastating contribution to the proceedings here today. He has allowed me to be briefer than I intended to be. The words of the Interception Commissioner, as expanded upon in his letter to the noble and learned Lord, Lord Ackner, should be read carefully by all who are interested in this subject.
	The proposition is superficially attractive. It seems to some people to be self-evident that it will facilitate the conviction of some evil and dangerous people, whether terrorists or organised criminals. To the outside eye, it can look sensible if we can, through some sophisticated supervised sieve, make available in court what can appear on the face of it to be damning evidence of wrongdoing. But that is a superficial attraction. The issue is much more complex and the downside of this proposal outweighs the benefits that it might bring. Indeed, the proposal is mistaken, misguided and, in certain circumstances, dangerous.
	Those of us who have held the highest offices of state—I was Secretary of State for Defence—become part of a unique and tight intelligence community. We therefore become privy to knowledge of, and responsibility for, a wide range of methods for collecting sensitive and secret information. I found that a sobering and onerous burden to accept at the time and to carry it to the end of my life. From my experience, I pay tribute to the professionalism, tenacity, ingenuity and, very often, sheer gut courage of so many of those in British intelligence services who safeguard our security. They deserve, and should get, our gratitude and commendation, and when, as in this case, they have a unanimous opinion, we should pay careful attention to what they say.
	I take seriously my obligation to protect both what I have come to know in the Ministry of Defence in the British Government and the other information and intelligence, including that from foreign sources, to which I had access while serving as Secretary-General of NATO. I shall share no secrets with the House today, although from my long years in the House of Commons, I recall that it was usually quite safe to disclose the most sensitive information in Parliament, because you could be absolutely sure that no one was listening to you.
	I just wanted to make a couple of points to the House and to the noble and learned Lord, Lord Lloyd, in particular, who also knows more than he can share with the House today, to show that this is a profoundly misguided and possibly counterproductive route to go down. The methods used to intercept communications are varied and many of them ingenious. All are legal, but many are very sensitive indeed. If those methods were to become known, however restricted the audience was that got to know of them, those sources would be compromised and, in many cases, probably ended. Not only that, but the lives and safety of those involved in such communications methods might be compromised or threatened.
	I am not an expert in English law, but the principle of discovery is built into that law and our interrogative and confrontational system. If one element of evidence is put into court, it will be simply a matter of time, logic or even fairness that all the intercepted information is placed outside the protected world where it had previously resided.

Lord Goodhart: My Lords, the rule of discovery is not absolute and written in stone, never to be changed. Why should not the rules about what discovery must be given be modified as they apply to security-sensitive material?

Lord Robertson of Port Ellen: My Lords, I am sure that clever lawyers could draw up a precise framework and even cleverer lawyers will be able to find their way round it. That is the point made by my noble friend Lady Ramsay. Depending on the discretion of the judge—at the end of the day, that is what we would be depending on—the defence can range far and wide, as it has done in the past, and compromise material that should not be compromised.

Lord Thomas of Gresford: My Lords, what case does the noble Lord have in mind where the defence has ranged far and wide and introduced matters that have national security implications?

Lord Robertson of Port Ellen: My Lords, I am not in a position to give a precise answer to that, but I recollect that recently there was a case where some form of intercept material was put into court and the judge decided that all the material, not simply the extract that was relevant, had to be transcribed and be part of the court's evidence. I am merely postulating what might happen if the current restrictions were lifted. The words of the Intercept Commissioner should be listened to carefully, because he is also an eminent lawyer. We would open a Pandora's box.

Lord Lloyd of Berwick: My Lords, the answer to that problem is that if the judge decides the point in favour of admitting evidence that would be embarrassing, the prosecution can always withdraw the case. That has happened many times. There is no difficulty there.

Lord Robertson of Port Ellen: My Lords, frankly, I can think of nothing worse than withdrawing the case halfway through. We are here discussing the effectiveness and deterrent value of the law. I accept that cases will not proceed to court and that bad people will not be prosecuted in certain circumstances. That is the price we pay for ensuring that the information is available. It is a fact that terrorist outrages have been prevented during the past few years, major channels of communication have been blocked and major criminal operations have been stopped because of information gained that cannot be put into court. Those people may not have been found guilty in court, but the public have been protected as a consequence of the procedures that are already in place.
	So although we pay a price and will have to pay a price in not having those people on trial and convicted, I believe that the price is acceptable for society, given the balance posed against it by the material being available. If the public think about it carefully, listen to the evidence of the consequences and are directed away from the superficial attractions of what is offered, they will come to the conclusion that we are best served by leaving well alone.

Baroness Park of Monmouth: My Lords, the noble Baroness, Lady Ramsay, has said it all—at least, I thought that she had until I heard the noble Lord, Lord Robertson. I sit in the same corner as them. Although I greatly respect the noble and learned Lord, Lord Lloyd, for the brilliance with which he conducted the Gulf War inquiry, I cannot support the Bill.
	I am not alone in resisting any proposal that could risk compromising intelligence collection and its methods. The Privy Counsellor Review Committee, which is clearly concerned that intercepted communications can never, at present, be used evidentially, recognises:
	"It is important that making intelligence available for prosecution does not compromise the collection and use of intercepted communications for intelligence services".
	The Interception of Communications Commissioner, who has been widely cited—including by the noble and learned Lord, Lord Lloyd—the right honourable Sir Swinton Thomas, stated categorically in his 2004 report that he is,
	"left in no doubt that the balance falls firmly against any change in the present law and that any amendment . . . would, overall, be damaging to the work of the security, intelligence and law enforcement agencies".
	He recognised that,
	"interception played a vital part in the battle against terrorism and serious crime, and one that would not have been achieved by other means".
	We cannot afford to lose that means.
	Further, both the commissioner and the Privy Council believe that the disclosure of the number of the warrants issued in the interests of national security would be against the national interest if it helped agencies hostile to the state to estimate even approximately the extent of the interception of communications for security purposes. Sir Swinton Thomas agreed with his predecessor, the noble and learned Lord, Lord Nolan, that disclosures in that area would be prejudicial to the public interest. If they are as worried as that about disclosing only the number of warrants and the extent of the coverage, how much more must we be concerned about the content?
	The Intelligence Services Commissioner in his 2004 report, is equally opposed to public disclosure of the number of warrants issued to the agencies because that would,
	"assist the operation of those hostile to the state if they were able to estimate even approximately the extent of the work of the Security Service, SIS and GCHQ in fulfilling their functions".
	We already have several well informed and serious bodies studying the issue that are able to make a just balance. Of course there is a degree of concern that probably motivates the wish of the noble and learned Lord to make that delicate and hard-won material evidential for the sake of the human rights of the defendant. Sir Swinton Thomas cites the Investigatory Powers Tribunal as follows:
	"Everyone has the right to respect for his private and family life, his home and his correspondence . . . There shall be no interference by a public authority with the exercise of this right except such as it is in accordance with the law and is necessary in a democratic society in the interests of national security . . . or for the protection of the rights and freedoms of others".
	Let us remember that there are a number of issues involving human rights, not only the human rights of the man or woman on trial.

Lord Goodhart: My Lords, I am grateful to the noble Baroness for giving way. Does she not appreciate that the defendant's human rights are not affected? The rights of the defendant are in no way affected by evidence against him being withheld. This is not a question of the human rights of the defendant, it is the efficacy of the prosecution with which we are concerned.
	We want a more effective prosecution here, not an improvement of the defendant's human rights.

Baroness Park of Monmouth: My Lords, I thank the noble Lord for that intervention and am very glad to hear that that is the reason for his position. However, many people's argument has been, and will be, that the defendant has a right to know everything that exists in evidence against him so that he may defend himself. That is the issue and it is also an issue of law.
	My concern is, as the ruling that I have just quoted says, the protection of the rights and freedoms of others, among whom I count the human agent, who in at least some of those cases will have been the means of securing access to the plans and communications of those planning or executing terrorism. As Sir Swinton Thomas says:
	"The task of the agencies working in this field has become more difficult and complex as a result of the proliferation of mobile telephones and the greater sophistication of criminals and terrorists".
	Things have moved so far since I knew anything about it that I do not even know what "IB" means. That may indicate that things have moved on. The hostile intelligence use of encryption is a great problem. There will be times when the key to that can be secured only by the penetration of a group by an agent. I assure noble Lords that, if we have that type of evidence, the defence will very soon be able to identify who was present at a particular meeting in Hamburg on a particular day and to identify the person who was slightly unlike the rest of them.
	In this complex world of a fast-moving communications industry and an increasing number of targets who develop highly sophisticated expertise in inventing counter-interception measures, we cannot afford to use intercepted communication in court, even in camera. A good defence lawyer and a sophisticated defendant could very soon set in motion enquiries that could, if a human source were involved, lead to the identification of that source, the end of that intelligence product and, probably, of the agent. Sources take years to infiltrate hostile terrorist groups. We have to be blunt and point out that at least some of those groups will speak esoteric, very unusual languages. It takes a lot of time, not only to acquire the languages but to acquire the approach, the access and the ability to move in that particular world. Sources cannot be replaced for many months, if at all. Coming back to the judgment that I quoted from the Investigatory Powers Tribunal, agents as well as defendants have human rights. The defendant will have the whole majesty of the law there to protect his rights—the agent will not; and, not least, the public will lose vital protection.
	In the face of the resistance to the Bill from such distinguished legal authorities as Sir Swinton Thomas, the noble Lord, Lord Carlile of Berriew, and the special committees involved daily in assessing the situation, risks and needs, with their experience of the problems of dispensing justice under threat from terrorists, I do not believe that we should change the law. It is vital that we recognise that this world is not like the criminal world. I fear very much that people will say, "Why don't we start with the criminal world?" but the same problems do not arise. Once you open a door, the door opens wider and wider and precedents are set. Although I deeply respect the noble and learned Lord and his motives, I urge the House to recognise that this is a very dangerous path to tread and we should not require it to be trodden.

Lord Brennan: My Lords, Parliament has a major role to play in the campaign against terrorism. There are those in this House who are neither totally for the Bill nor totally against it but wish Parliament to have the opportunity to examine whether this state of the law should prevail or be changed. In fulfilling that task, Parliament does no more than its duty, testing political integrity with public responsibility—it tests political integrity by investigating whether the law should stay the same and looking at the evidence, and public responsibility, in deciding after such an inquiry whether the public interest is best served by the law staying the same or being changed. I regard that as neither inimical to the intelligence services nor a danger to the realm but as a practical exercise of the parliamentary function.
	Should the law remain the same? I ask the question rhetorically because, as yet, I have no confident answer. Let me raise some of the issues that Parliament could properly consider in order for evidence to be given within the proper constraints of security. First, I cannot imagine that the prosecution or the intelligence services would wish to use this opportunity to introduce intercepted evidence if there were other adequate evidence to found the prospects of prosecution being successful. There would be no point; the balance would be completely wrong. But I ask rhetorically, because I do not know the answer as a parliamentarian: what is to be done if the critical evidence in a case is an intercepted communication? Is it then to be said that the balance of interest favours the continuance of secrecy and those guilty go unprosecuted? That is a serious moral question with which Parliament should grapple. If it transpired upon reasonable inquiry that that category of case were so small a prospect as to be discounted, the secrecy argument may prevail, but if there were a sufficient or significant number of possible cases where that evidence is critical, should we maintain the secrecy? The noble and learned Lord, Lord Lloyd, pointed out in a 1996 report that some 20 prosecutions might have been mounted if intercept evidence could have been used. That is a significant figure. But all I am asking for is inquiry.
	Secondly, in the modern communications system, do we make a distinction between the telephonic and the electronic? Is an intercepted telephone call to be kept secret but an e-mail, which is simply a printed document, to be used? If so, what are the differences? I find that technically worth investigating. These days, a BlackBerry will accommodate both the telephone call and the written message.
	Thirdly, I endorse the concerns raised about disclosure. It is a serious issue that concerns the House. I know from personal experience of a case in Ireland where a limited amount of disclosure led to such a degree of litigation that it finished up in the Supreme Court of Ireland on the extent of disclosure in a terrorist case. That is extremely serious. There is no point in passing the Bill without responsibly addressing that question and producing a just solution.
	Despite the reservations of the noble Baroness, Lady Park, I am ready to make a distinction between serious crime and terrorism. Why not? Why should I treat a determined drug runner making millions of pounds as in a similar category to a terrorist who takes life indiscriminately? I am ready to make such a distinction if the facts justify it and if the level of secrecy in that sector is different from the terrorist sector.
	Anticipating Monday's debate, Clause 17 of the Terrorism Bill envisages the prosecution of terrorist offences committed abroad. Are we to have the irony of a prosecution launched from this country which can use interceptive communications taken from the United States or another country, but not communications of a similar kind obtained in this country? I find that a peculiar aspect of a campaign against terrorism, if that is what we can anticipate. The Bill is in skeletal form, and there is plenty of opportunity to discuss the full range of safeguards that might sensibly be considered.
	Finally, I beg to differ with the eloquence of the noble Baroness, Lady Ramsay, about the nature of the debate. I do not detect clamour. When I hear the Metropolitan Police Commissioner seek the use of this evidence in court, the recently retired Director of Public Prosecutions in the same vein and the Newton committee with its Privy Counsellors, that is not clamour. It is reasoned argument, which deserves a reasoned response. I admire in equal measure Sir Swinton Thomas, the present Interception Commissioner, the noble Lord, Lord Carlile of Berriew, and those who hold a different view. But the very fact of differing views surely bespeaks the responsibility of Parliament to inquire.

Baroness Park of Monmouth: My Lords, does the noble Lord agree that there is a difference between the views of Sir Swinton Thomas and the noble Lord, Lord Carlile, who are privy to all the issues, and, I am sorry to say, the view of all of us? Secondly, does the noble Lord agree that what Sir Ian Blair, the Metropolitan Police Commissioner, said referred to criminal cases? Our point is that it might work for criminal cases, but once you start on that slippery path, it will go on to the rest.

Lord Brennan: My Lords, I naturally respect the noble Baroness's views, but I do not recollect from Sir Ian's speech that he made that distinction. Whether he did or did not, he merely provokes the opportunity for debate. On the status of the Interception Commissioner, the noble Lord, Lord Carlile, and those who are privy to information that influences their views, I am afraid that I take a very simplistic parliamentary view. Within proper constraints of security of information, it is ultimately for Parliament to decide those matters and not those who my noble friend Lord Robertson called the unique and very tight intelligence community—brave, sophisticated and vital as it is.
	Finally, the question of whether Parliament should debate this issue arises. If those who have spoken in favour of the present system are right, they may prove to be right in subsequent debates. If change is to be made, I am sure that the House would consider it with great prudence and considerable reserve. But, at the very least, if we are to accept that the rules of the game have changed and if we are to acknowledge that the campaign against terrorism demands action by all, above all it demands at least consideration by this Parliament.

Lord Lyell of Markyate: My Lords, I am very glad to follow the noble Lord, Lord Brennan, who has reminded the House that we are dealing with an extraordinarily difficult issue on which there are very respectable views on both sides of the argument. I grew up in parliamentary terms starting in 1979 as Parliamentary Private Secretary to Sir Michael Havers when he was Attorney-General. Very slowly, I was let into some small part of the secret world in which others in this House have moved much more widely. I think, of course, of my noble friend Lady Park and the noble Baroness, Lady Ramsay, with enormous respect in that regard. I express my thanks to the noble and learned Lord, Lord Lloyd of Berwick, for initiating this extremely important debate. I approach his Bill with great caution, but I approach it in very much the same way as the noble Lord, Lord Brennan. This is an area where genuine inquiry is justified—inquiry in a very careful and, if necessary, secret way. But it is a matter for sincere discussion.
	I have grown up as a lawyer with most of the great lawyers sitting in the Chamber. I have been led by them. I have been in long cases with or against them. I have a very high regard for Sir Swinton Thomas. I am also a member of the Inner Temple. When I find that there are differences of view between him and the noble and learned Lords, Lord Ackner and Lord Lloyd, I realise that we are in very sophisticated country. When I became Solicitor General and, ultimately, Attorney-General, I was allowed a rather more penetrating look into small portions of this world.
	If you regard the whole security services world and the whole criminal justice world as a cake, there are some who see slices of it, but I suspect that the noble Baroness, Lady Ramsay, and my noble friend Lady Park, have seen perhaps a very large part of the cake. But I doubt if there is anyone in the world who sees the whole cake. The need-to-know principle applies as one of the ways of protecting it. But that does not mean that Parliament should not be entitled, in a careful and sensible way, to investigate.
	I worked closely when he was a prosecutor, and briefly when he became Director of Public Prosecutions, with Sir David Calvert-Smith, who is a lawyer of the highest integrity and intelligence. He believes that in some cases—it is always only to be some cases—this might be of genuine assistance, without causing disproportionate damage and, I hope, without causing any damage whatever to the security services. The fact that Sir David believes it so sincerely, that Sir Ian Blair believes it and that the Newton committee regard it as a strong case means that we have a very real argument for moving cautiously forward, giving this Bill its Second Reading and getting it into a Select Committee.
	I do not express any opinion beyond that stage on whether, ultimately, I would vote for or against the Bill. I would certainly require the very strongest safeguards, but I do not take the view, which the noble Lord, Lord Brennan, put well, that because you look at some aspects and dare to peep through the door, the door will necessarily swing open. As he rightly said, we see some communications, but we do not see all communications, and we never should. I know a good deal about the problem of disclosure. During my period on watch as Attorney-General, the issue of public interest immunity certificates was rightly put under strong scrutiny in a wide variety of areas. It is not easy, particularly when you have to have accredited counsel who are not acting for the defendant, but who are coming in as intermediaries to try to see fair play. Because they are security cleared they can see more material than could possibly be properly disclosed to defence counsel or defence solicitors who, by the nature of their role, would have to reveal it to their client. They, certainly, could not necessarily be relied on not to reveal it because they would feel a very strong conflict of interest. So we have to be very careful.
	But what are we balancing all this against? It is particularly relevant that this debate is being held on the Friday before we debate the Terrorism Bill on Monday. We are considering this against the backdrop of a world in which—going back four years to the Anti-terrorism, Crime and Security Act 2001, the measure struck down by the Law Lords resulting in the release of the 23 accused from Belmarsh prison—we have actually detained people without trial in this country, in some cases for just over two years, something we had not done since the days of the Star Chamber.
	We have also had a very serious debate about detaining people for 90 days pending charge. A number of our citizens are under control orders. We have to think about placing restrictions on the liberty of the subject in order to protect the people of our nation as a whole in a way that we have not had to consider before. This Bill, which may play a small but significant part in bringing to justice those most likely to be drug runners and what might be thought of as ordinary criminals, but possibly also those in the terrorist world, may help us to be more proportionate in how we take away liberty without any form of trial at all.
	I conclude by making a simple point. While it is obvious that noble Lords who have worked in the security services feel passionately about this, and while Sir Swinton Thomas obviously feels passionately that we dare not open the door at all, we should give the Bill a Second Reading and move for it to be brought before a Select Committee. We should then think very carefully about what we learn from that committee as to whether we allow it to go further. The Government certainly have control of the Bill. It would be difficult for this measure ever to become law unless the Government are convinced, because it would certainly be defeated in another place. However, this is a serious debate and I hope that it will be allowed to continue.

Lord Judd: My Lords, I am happy to follow the noble and learned Lord, Lord Lyell, because I am very sympathetic to many of the arguments he has put forward. Perhaps I may say at the outset that I am immensely grateful to the noble and learned Lord, Lord Lloyd of Berwick, for having given the House the opportunity to consider this matter. I hope that my personal and much respected friend, my noble friend Lady Ramsay, will forgive me if I say that I envy her the absolute and unqualified certainty of her conviction in these matters.

Baroness Ramsay of Cartvale: My Lords, I am grateful to my noble friend for giving way. Since he has mentioned my name, does he not think that perhaps the strength of my conviction comes from over 22 years in government service? I have a great deal of experience which has led me to be absolutely certain about this issue.

Lord Judd: My Lords, of course I take the intervention of my noble friend in the spirit in which it is made. It is characteristic of her personal warmth and sensitivity. But I remain of the position on which the noble and learned Lord, Lord Lyell, has argued. These are incredibly complex matters and I have no hesitation in saying that I anguish about them. I have to consider the points made on both sides of the argument. They have been made with force and must be taken seriously. But what I am trying to do, and here I think that I represent the position of many others, is find the right way forward. What I admire in the proposition that has been put before us by the noble and learned Lord, Lord Lloyd of Berwick, is that it would give us the opportunity to consider the issue dispassionately and in more depth. In that way we would become even more convinced that any policy we pursue has been thoroughly examined rather than just accepted on the say-so of those who undoubtedly carry the weight of heavy responsibility.
	That is the first point I wanted to make. In July I was encouraged when, in the midst of those terrible events and the pressures that flowed from them, the Prime Minister expressed his personal readiness to examine the issue and made clear his belief that the case was not open and shut, rather that it was one which could do with examination. He has candidly put forward his position, as things stand, as one that rests on the advice of the police and the security services. Of course that puts a terrific responsibility on them and I take second place to no one in my admiration for the quality and dedication of those in the police and security services, as well as for much of the very fine work which they do to protect our society. But as an unqualified adherent to parliamentary democracy, I believe that the sovereignty of Parliament cannot be overlooked in these matters. In the end, for policies in crucially important areas, the view and responsibility of Parliament is crucial. Therefore the idea of a Select Committee is excellent.
	We have heard the arguments—they cannot be underestimated—about the need to protect the integrity of security systems, of sources and, indeed, the safety and well-being of those who work in the security services. All those issues have to be taken very seriously indeed. A Select Committee of the kind proposed should be able to take the arguments fully into account. However, what is so persuasive in the proposal of the noble and learned Lord is his emphasis and, indeed, re-emphasis of the point that any action taken would be on the initiative of the prosecution and that the intervention of the Secretary of State to protect the matters about which my noble friend Lady Ramsay and the noble Baroness, Lady Park, are so concerned would remain as real as ever.
	I have found the exchanges this morning between the noble and learned Lords, Lord Lloyd and Lord Ackner, a little disturbing. They reveal to me as a layman that among these august centres of expertise and legal knowledge, on crucial matters there can be a difference of interpretation. If anything in the debate has brought home to me the importance of further and wise consideration—such as in the context of a Select Committee, for example—it is what has been illustrated to us this morning. Two noble and learned Lords whom we deeply respect—

Lord Ackner: My Lords, I think I made it clear that I was not putting forward my interpretation. I thought it was quite wrong for Sir Swinton Thomas's views to be suppressed. They were being suppressed and, accordingly, I rose to my feet to make sure that they were put before the House. That was the function I sought to perform.

Lord Lloyd of Berwick: My Lords, perhaps I may answer the point since it involves me. The reason I did not refer to Sir Swinton Thomas's views is the very reason which he explained to me this morning: that he did not want those views repeated in this House. That is exactly what my noble and learned friend has done.

Lord Judd: My Lords, I am not a lawyer, but after those two interventions I am close to saying, "I rest my case". It appears that two deeply respected Members of our House have had a conversation with the same person and have come to different conclusions regarding what that person has said.
	If this can happen on such a crucial issue, how important is it to the whole sphere that we should have a sober examination in depth of the propositions and issues before us?
	Let me conclude with a few observations. The noble Lord, Lord Goodhart, emphasised—I thought a little defensively; I hope he was not being defensive—the importance of strengthening the effectiveness of prosecution. I agree with him on that. It is totally wrong that people who may be guilty of the most heinous offences should have any chance of going free because of the limitations on what can be considered in court.
	But there is another side to the argument. We are living in the real world in terribly dangerous times, and the battle for hearts and minds is crucial. It has always been central to the acceptance and endorsement of the British system of justice that we strive to ensure that justice is not only done but is seen to be done. As soon as one moves into the realm of security, there are, of course, compromises. I am a realist and I know that compromises will always be there if you accept the importance of security. The issue is where the compromise is struck—which compromises are acceptable and which are not; what safeguards there are; what arrangements there are. Those matters need to be tested and, I suspect, periodically examined in the Select Committee, to make absolutely certain that the compromises are as good and wholesome as possible. If there is any danger that justice is unnecessarily not being seen to be done and is unduly secretive—exclusive, if you like—in the way it is administered, that will play into the hands of the cynical manipulators of the young and others whom they wish to recruit to their extremist causes. That would be an own goal of very serious dimensions.
	By his proposals, the noble and learned Lord, Lord Lloyd, has presented the House with a wonderful opportunity to take forward a dispassionate, measured examination of where we stand and whether where we stand is the best way to confront the issues of the future. In doing so, it would be foolish not to take into account the concerns that have been honestly and repeatedly expressed by the noble Baroness, Lady Park, and my noble friend Lady Ramsay. But we must also take into account the reality of the context in which we are operating and the need to ensure that we do not inadvertently strengthen the position of the extremists.

The Earl of Erroll: My Lords, I rise to speak in this debate because I have spoken on RIPA and given consideration to the proposals for data retention, about which I am being lobbied. I am interested in ICT—information and communications technology—and I sit on the advisory board of ISTA, the Information Systems Security Association. So this is an area in which I am interested.
	When I first saw the proposals in the Bill my first thought was "Why not?" I have often wondered why such information is not available to the courts and not used to prosecute criminals in order to protect us. I then thought that it may be to cover up the fact that the intelligence services do not receive as much information as we think they receive and that it may be a way of scaring criminals. I then thought a bit harder and came to the conclusion that that is probably not so, particularly as I know something about technology.
	The next question that arose in my mind was: how often are intelligence sources not given enough information to trap suspects in some other action or something else that they are doing? In other words, why can they not use the intelligence to catch them for something else? It must be fairly rare that you have to rely only on intercept evidence to trap someone. The only case I can think of is where I was involved in considering some fraud issues about 15 years ago and we were trying to find where Mr Big might have slipped up and communicated with some of his underlings. Of course, such people try to cut themselves out of the picture—you see this in stories about the Mafia and so on—and so you try to trace that one piece of communication that they made to someone in the field because they do not want to get their own hands dirty. So I can see these proposals may be useful in that kind of situation.
	But then we come to the next issue—which really worries me—and that is the question of what evidence is presented in court if some of it is protected. This could lead to selected presentation. It is rather like advertising the review of a play, where the good bits are printed, the bad bits are cut out and you end up with a highly selective presentation. Sooner or later someone will manufacture or twist evidence in order to present too good a case. Something will come out of the woodwork, there will be a scandal and the judges, quite rightly, will say, "We need to know more. You will have to reveal more about this evidence". The point has been made by several noble Lords that this could be the thin end of the wedge and will slowly open up—probably because one of the agencies will make a mistake.
	I am also concerned that we start off in law with great barriers and extreme confidentiality and then something comes into fashion—anti-money-laundering, for example—and suddenly the protected client-lawyer relationships and communications are completely destroyed overnight by a government who think it is a good idea to do so. Knowing that Parliament will suddenly take these rather extreme views over a short-term issue, we have to be very aware and careful to ensure that we are not opening up a can of worms.
	Some people who wish to enhance their careers—this is not particularly concerned with those who work in the intelligence services, but they are no different from other human beings—may use information that they should not use to push their career forward, even though they have the power to do so. We have to be very careful that that should not happen and we need to put in very strong protections.
	We know—you cannot get away from the fact—that there are inter-agency rivalries. The reason for all these agencies is to ensure that there is some rivalry, to ensure that there are silos and to ensure that all the information does not leap across them. But this can lead to mistakes being made and, once you start making mistakes you have the problem of reverse engineering in the way people think. Having written software programmes, I am aware of this problem. I have always enjoyed looking at a programme and working out the thoughts of the person who had written it. Given a system, I am very interested in how to get into it or around it. It is not hacking, particularly, but a consideration of where its vulnerabilities are and so on. Once you are aware of the concept that it is possible, you can then work out how it can be done. So that is one of the dangers.
	You can work in two ways: either on an analysis of what has happened or an analysis of what has not happened—in other words, you work on the cases that have been brought to court and wonder why the other ones have not been brought, or the other way round. It is amazing what inadvertent information you can give away by your behaviour and by what you reveal. So that is another issue that needs to be looked at extremely carefully.
	I am aware that some other countries do not receive the intelligence information that we receive. I do not particularly want to know why or why not—I ought not to because I am not cleared to that level of security—but it is a known fact that has been quietly revealed in the speeches that have gone before me. But would it be all right to reveal some information at the lower end of the scale? We open people's letters, we can photograph letters and written information and so on, so why, when prosecuting the smaller criminals, can we not use telephone tapping information? Or can we? I am not sure where the lines are drawn in intercepting communications.
	Information obtained under Clause 1(1)(b) of the Bill, which relates to the admissibility of intercept and metering evidence, is retained under RIPA and is available to a plethora of government agencies. As that is well known, why can we not use that kind of information? I think it would be perfectly all right to use information that is obviously and effectively in the public domain, although with restricted access. If the police have tapped a telephone or carried out some interception that is above board, I cannot see the problem in using any of that information. But I can see a problem with high-level intelligence information, about which we have to be very careful.

Baroness Taylor of Bolton: My Lords, I am pleased to be able to participate in this very well informed debate. I am happy that such issues should be raised from time to time, although perhaps not on an annual basis, as seems to be suggested in some quarters. It is right to examine and re-examine these complex issues in a Chamber such as this where their complexities can be brought out rather than highlighting the simpler and more sensational attitudes which we sometimes read about even in the so-called serious press.
	My reason for wanting to speak is that for four years, until the last election, I chaired the Intelligence and Security Committee. We followed the discussions on this matter with great interest and discussed it with Ministers and with agency heads on many occasions. I reassure the noble Earl, Lord Erroll, that discussions about intercept do not take place simply with the intention of scaring the criminals—they work on many occasions. The ISC followed through some of the operations that had taken place and saw the importance of intercept in, for example, illicit drugs cases and financial crime and the numerous arrests that resulted.
	It has been said several times this morning that the use of intercept material as evidence has an obvious, significant and superficial appeal. If it was as simple as just using evidence with no consequences, there might be a very strong case for it. People have looked at what happens elsewhere. Noble Lords have quoted examples of what happens in other countries, where there are significant differences in the legal system.
	People have assumed that there will be more convictions if we use intercept material in court. The case against that, which was argued by my noble friend Lady Ramsay and the noble Baroness, Lady Park, is very strong indeed. When the Intelligence and Security Committee looked at this issue, we did not come to conclusions, because that was not our role then. We had to understand that there was a significant downside to going down this path. In fact, I would go so far as to say that the use of intercept material in court could be counter-productive in getting convictions and pursuing certain cases, for reasons that I shall give later.
	The noble and learned Lord, Lord Lloyd, said that there had been five reviews in 10 years. The latest and most in-depth review, carried out by the noble Lord, Lord Newton, was very important. It included members of the Intelligence and Security Committee so that we could dovetail our work with that of the noble Lord's committee. The outcome demonstrated just how complex these issues are, which means that we should not rush to a judgment or complain that this issue has been around for so long. The message from the fact that we have had five inquiries in 10 years is that this is an incredibly complex subject.
	Ministers have spent a great deal of time on this issue. My noble friend Lord Judd quoted the approach of the Prime Minister, which is that if we can use intercept in court and it can be productive, then let us use it. Those colleagues who are in favour of the use of intercept should ask themselves why it has not been used yet. The reason that we do not use intercept in court as evidence is not because people want to block it or preserve secrecy for its own sake but because of the very real downside of taking that path. People have to understand that. The Newton committee brought that out to a certain extent.
	My noble friend Lord Brennan asked why we could not treat serious crime and terrorism differently when it comes to the use of intercept material as evidence. Part of the problem is that you cannot compartmentalise the methodology that is used in one area and not in another. Disclosing intercept as evidence in court can lead to disclosure of methodology which is then transferable knowledge to a different area. That is why I emphasise how complex the issue is; with the best will in the world, we cannot simply say that we must move along that track and the consequences would always be beneficial. We could end up losing more than we gain. My noble friend Lord Robertson said that certain criminals might not be prosecuted because we could not use intercept and that we would have to face that consequence. My noble friend Lord Brennan questioned whether that was wise; it is a genuine moral dilemma.
	If the consequence of disclosing our methodology is that the agencies cannot detect and apprehend, and therefore cannot possibly prosecute, a wider range of criminals or terrorists, then we have lost out. It is a moral dilemma which we should be realistic about and face. The dangers of going down the road proposed are very significant.
	Other aspects of this issue have not been dwelt on today. I am not sure what lawyers will think about one which was raised in the Newton report. It was also recently raised by the noble Lord, Lord Carlile; as well as making interesting but somewhat belated comments about the proposed 90-day period he has spoken of using some form of investigatory magistrate. I am not sure whether Ministers are still considering that, but it could lead to some hope that something could be used in certain circumstances. I am not sure that it is the way forward, but so far as I have been able to judge, it might be the most likely way of making some progress on certain issues.
	I am less convinced about the proposals on safeguards, such as the idea that only the prosecution should introduce such evidence. I am not sure to what extent our lawyers would allow that to remain the situation, given our human rights legislation. Other issues such as having two or three different types of warrant could also create real problems for the agencies. How do they know at the beginning of an inquiry what will be needed in evidence? They may apply for one type of warrant and if the inquiry takes a different turn, they are left high and dry, unable to produce that as evidence.
	Finally, where should we go from here? The noble and learned Lord Lloyd, suggested a Second Reading, followed by a Select Committee, and there has been some support for further inquiries by Parliament. I remind the House that the Intelligence and Security Committee is a committee of parliamentarians, who represent us. They have access to the information and have already spent time looking at it. I suggest that if further work needs to be done by parliamentarians, the Intelligence and Security Committee should be doing it and, when its members feel it appropriate, they should be able to go public or say something to the House or to Parliament as a whole. That would be the best way forward. This is a complex issue, to which there are no simple answers, but the Intelligence and Security Committee can be useful to all of us in taking these issues further.

Lord Mayhew of Twysden: My Lords, having by misfortune missed much of the speech given by my noble and learned friend Lord Lloyd, I thought it only courteous to vacate my place in the list of speakers—fortunately being able, in sufficient time I hope, to notify the noble Lord, Lord Goodhart. Having heard the whole debate, I shall use the gap to make a point that, I do not believe has been alluded to as yet. It is a point of some interest—namely, that we are not the only country in the world, unfortunately, that faces a massive security threat, nor the only one that seeks to protect its safety by the employment of sophisticated covert agencies; yet, apparently, throughout the common-law world, with the sole exception of Ireland, we are the only country to deny ourselves in proceedings to convict offenders the admissibility of evidence obtained from intercepted communications. One wonders how countries such as America or Australia, which undoubtedly have sophisticated covert security agencies, manage to accommodate their interests while at the same time admitting that evidence. That seems to me a matter of legitimate and practical inquiry by Parliament—and by this House, in particular.

Baroness Ramsay of Cartvale: My Lords, I am grateful to the noble Lord and am sorry to interrupt, but I shall do so very quickly. I am sorry if I did not make it clear in my own intervention, but Australia and America use the evidence from police intercepts. We have gone into the matter of different warrants, and so on, but that is not the point; the point is that they do not use intercepts from the sophisticated agencies, as the noble and learned Lord put it. In Australia and America, it is the warrants from police intercepts that are used in the courts.

Lord Mayhew of Twysden: My Lords, that is an interesting point and one that might properly be examined by the Select Committee that this Bill, if it gets its Second Reading, will enable to come into place. I am in agreement with what has been said by so many noble Lords, and in particular my noble and learned friend Lord Lyell of Markyate and the noble Lord, Lord Brennan, on this—and I believe that I have more than used up my time in the gap.

Lord Thomas of Gresford: My Lords, perhaps I may say how much we welcome this important debate and how much we support the idea behind the Bill and the suggestion that has been made that a Select Committee should examine the whole picture, following this Second Reading.
	All of us in this House are looking for a balance. On the one hand, there are the ordinary processes of justice that we have in accordance with our traditions sought to export to the whole world: concepts of fairness and fair trial and due process. On the other hand, there is the need for security and the protection of people who are at the moment suffering from a terrorist threat. We shall pursue this matter next week, to some degree, in the debate on the Terrorism Bill, in which we shall consider whether people accused of being terrorists should be tried on evidence before a jury and punished in the ordinary way or whether they should be held without trial and possibly without charge on the basis of inadmissible evidence such as that which intercept evidence produces.
	This is not a unique or new debate. In 1994, the noble and learned Lord, Lord Mustill, one of the Lords of Appeal in Ordinary, in the case of Preston said:
	"Those who perform the interceptions wish to minimise the dissemination of the fact that they have been performed, since it is believed that this would diminish the value of activities which are by their nature clandestine. We need not consider to what extent this preoccupation with secrecy at all costs is soundly based for it has been treated as axiomatic for decades, if not longer . . . The need for surveillance and the need to keep it secret are undeniable. So also is the need to protect to the feasible maximum the privacy of those whose conversations are overheard without their consent. These policies are in flat contradiction to current opinions on the 'transparency' of the trial process. Something has to give way".
	That view has been reflected in the content of some of the speeches that we have listened to today.
	On the one hand, we have the former Director of Public Prosecutions and the Commissioner of the Metropolitan Police seeking to introduce into the trial process evidence that is currently inadmissible; on the other, we have the views trenchantly expressed of Sir Swinton Thomas, for whom I have the greatest regard. He is no relation to me, but I replaced him on the Criminal Injuries Compensation Board. He and others—possibly including my noble friend Lord Carlile, though I have not had a chance to talk to him—have strayed into the intelligence community. If you do that, and you meet people with such formidable, trenchant and assured views as the noble Baronesses, Lady Ramsay of Cartvale and Lady Park of Monmouth, you meet people whose views no doubt carry considerable weight. But we are all seeking that balance.
	What is unique about intercept evidence and the intercept warrants that produce it is that the product cannot be used in a court of law; but the paradox is that foreign intercept evidence can be. The noble Baroness, Lady Park, referred to a person being in Hamburg; if that person was involved in a telephone communication from Hamburg, the German authorities could undoubtedly intercept that conversation and it could be used in a British court.

Baroness Park of Monmouth: My Lords, I believe that it has been made plain by a number of noble Lords that the issue is not straightforward telephone communication—it is the far more sophisticated mobile telephone and that extension of things that is at issue. Also, if the Germans make a decision and are prepared to let us have the result, that is fine; but it does not alter the risk to our system if we go in that direction.

Lord Thomas of Gresford: My Lords, my point is that it does not really matter what instrument produces the communication. If foreign authorities intercept it, it can be used in this country in a British court of law. So there is nothing wrong in principle with the use of intercept evidence, when it comes to lawyers or the courts. That is not the reason why it is not introduced.

Baroness Ramsay of Cartvale: My Lords, the point is—and the noble Lord is not quite seeing it—that if another country does not mind risking its sources, that is fine. I do not see why he finds it such a paradox, however. We are talking about British intelligence and material, and there is not a lot of relevance in talking about using evidence from another country in a British court.

Lord Thomas of Gresford: My Lords, I entirely follow the noble Baroness's point. Indeed, I propose to deal with it shortly; I am just leading up to it, and I am making that preliminary point before getting into the argument and grappling with the points that the noble Baroness has raised.
	Intercept evidence is not admissible, but directed or intrusive surveillance or the use of covert human intelligence under Part 2 of the Regulation of Investigatory Powers Act 2000, can be. So, for example, there is no problem about a member of the security services breaking into somebody's home and planting a bug there or for the product of that particular piece of covert surveillance being used in court. If a person's car is bugged, there is no problem in producing a record of the conversations that take place within the car. So, on the one hand, there is total prohibition on intercept evidence, and, on the other, you can use foreign intercept evidence and the product of surveillance freely in the courts of this country.
	If government agencies intercept your communications legally, not just the content but the very existence of such data cannot be mentioned in a court of law. The interception cannot be used to provide evidence either. There are these drawbacks. A prosecution may not proceed because the only evidence is intercept evidence. It may be very strong, perhaps a confession or an admission. It may be part of a conspiracy that is going ahead, which could be fully proved by intercept evidence. However, because of this absolute prohibition, it cannot be used, and guilty people get away.
	There is another aspect. The prosecution may not be able to rebut a plausible defence put forward in a trial. It may have intercept evidence in its possession, such as recorded conversations, but it may not use it. It knows the defendant is lying, and that the jury would be influenced if it could hear what the defendant said on the phone or on the Internet, but it cannot use it. People can be acquitted for that reason.
	There is this aspect: the defence does not know of material that undermines the prosecution and supports its case. It does not even know that its conversations have been intercepted and recorded. There could well be material that would acquit it, but it is not admissible and anyway it does not know it exists. Defendants may be convicted quite unfairly.
	Arguments against admissibility have been put forward in this debate. Some of them seem to be founded on a mistaken stereotype, one that causes amusement in this House, as happened yesterday: that of the defence counsel who conducts his case in a malign and dishonest way regardless of the public interest. As the noble Baroness herself said, the defence counsel may range far and wide in an adversarial contest. There could be unacceptable disclosure of techniques by reason of the way he conducts his case. The noble Lord, Lord Robertson, said that "clever lawyers will find a way" around anything put in their way that would protect sources, and so on.
	As I have said on previous occasions, that is a total distortion of what actually happens in court. When I asked the noble Lord, Lord Robertson, whether he could tell me of a case where defence counsel has extracted information that has been to the detriment of the security of this country, he was unable to do so. These are stereotypes that have no foundation in reality.
	It is said that the use of the material will disclose interception techniques and capabilities and may give rise to counter-measures by criminals or terrorists, which might greatly reduce the utility of that resource. For centuries, though, the courts have been quick to protect informers, and to ensure that the names of informers are not revealed in court. We are in a different world and technology has developed, but the court still has complete power, through the use of public interest immunity applications, to protect from disclosure information that is not in the public interest. If the judge were to hear it being put forward by a prosecuting counsel that, "If this information goes in, it will damage the security services", he can say: "It will not go in". He has control.

The Earl of Erroll: My Lords, I speak from the IT point of view. IP telephony was mentioned earlier as being difficult. I will not make any public comments on that, but a non-technical person might not realise that it would technically be possible to work out from what was presented in court where someone intercepted that communication from, because there are only certain points at which it could be intercepted. The very revelation that it was possible to get that information would then awaken one to what was going on behind the scenes. It is a technological process that lawyers would not realise was happening.

Lord Thomas of Gresford: My Lords, I am grateful to the noble Earl for his intervention because it allows me to make this point. If prosecuting counsel goes before the judge, he is not giving his own opinion, but telling the judge what he is instructed to say, not just by the CPS or whatever prosecuting authority is behind him, but also, behind it, the security services. I have appeared for the prosecution with one solicitor from the CPS and one from the security services sitting behind me to give the very sort of advice in that particular case to which the noble Earl refers. That is common practice. So, if there is an objection, the judge will know what that objection is and how these matters may come to light if the evidence is given.
	Another objection to admissibility is that it does not matter very much; it is not very probative. I think the noble Baroness, Lady Taylor of Bolton, made that point. From her own experience on the committee, she thought that not a great deal of value would emerge. Sometimes, it is said, there would be difficulties in identifying a speaker. I have had experience of this quite recently in a case in Harrow involving the importation of a large quantity of heroin, some £50 million-worth, the second largest importation into this country. There we had foreign intercepts, buggings of cars and of conversations and so on, and it was highly probative. As for difficulties in identifying who was speaking, they simply did not arise. Even though some of the conspirators were speaking in Turkish, some in Albanian and some in English, there was no problem in identifying who was speaking at a particular time.
	Then it is said that disclosure would be an intolerable burden—keeping records of all the conversations that take place, and so on. In the case to which I referred, I asked prosecuting counsel to ask the judge whether there was anything in the intercepts that would assist the defence case. He said to me, "No. I know my duties under the Act. I am fulfilling my duties". And that was it. There was nothing I could do about it. I had to rely on him. I trusted him to do his job, and still do. Lawyers have a considerable degree of professionalism, and act in accordance with the rules and traditions of their profession.
	I think I am going on too long, so I will bring my remarks to an end. We support the Select Committee's idea. We think that decisions in this difficult field should be evidence-based, and should be based upon a consideration of all the issues, not just the single views of the intelligence services.

Lord Cope of Berkeley: My Lords, once again the noble and learned Lord, Lord Lloyd of Berwick, has raised a most interesting debate, even if he has chosen the slightly unusual vehicle of a Private Member's Bill in which to put it before your Lordships' House.
	When I previously debated this matter with the noble and learned Lord and others five years ago on the Regulation of Investigatory Powers Bill—which is now an Act, of course—it was clear that there was a serious case to answer. The noble and learned Lord has expressed it again today with his usual clarity and forcefulness. However, it is also clear that there is a very considerable body of well informed opinion which takes the opposite view and which we should also respect, and which was expressed most clearly today by the noble Baroness, Lady Ramsay, the noble Lord, Lord Robertson, and my noble friend Lady Park of Monmouth. The background to what is an apparently simple question is very complex, both legally and technically.
	We all know that technical progress regarding mobile phones and communications more generally races ahead. That has been referred to by several noble Lords in the course of this debate. Sometimes these changes no doubt help the security services but sometimes the reverse is the case. We can be sure that, like the security services, criminals and terrorists devote a great deal of expert time and effort to getting and staying a jump ahead. I do not know whether there are at present effective methods of tapping communications on the Internet, which seems to be the coming method of communicating. If such methods exist, I do not know whether they will count as intercepts or "bugs" for evidential purposes. They could fall either side of the line. There is, after all, a distinction between evidence obtained from telephone intercepts and that obtained from telephone bugs, as the noble Lord, Lord Thomas, said. The difference between the two is very slight but the difference regarding how they can be used in court is total. Much more difficult problems will arise in regard to e-mails, BlackBerries and all the other latest devices. I do not know whether the Minister will be able to give us more information about how those newer methods of communication will be affected by the measure, and perhaps it would be best not to publicise that, but the answer affects whether the Bill has any value because if the newer methods of communication are not open to the same problems, the Bill will not be of much value.
	As has emerged clearly in the debate, the balance that we have to assess is whether there are many cases of serious criminals and terrorists who avoid conviction because of the restrictions on the use of this evidence on the one hand and whether the disclosure of the methods which would result from the use of such evidence would damage the ability of those who protect us to go on doing so as effectively as they do. Neither of those questions can really be judged by outsiders in public. Those involved in prosecutions can judge whether many prosecutions will fail on those grounds—we have not heard much evidence on that today one way or the other—but only those involved in the security services and the intelligence world can judge whether the effectiveness of protection would be damaged.
	I echo the tribute that the noble Lord, Lord Robertson, paid to those who work in the security and intelligence services and the whole of that world. They are immensely brave, have high expertise, and we rely on them a very great deal. In considering their objections to the measure, such contacts as I have had with them leads me to make the following point.
	I do not believe for one moment that anyone involved in the intelligence and security world would wish to do anything that would prevent terrorists and, for that matter, serious criminals, being convicted. On the contrary, their whole lives and expertise are devoted to trying to get people into court and to stop them doing the things they are attempting to do. They have no interest in prosecutions not succeeding for whatever reason. They spend their lives trying to ensure that they succeed, and that the terrible things, whether resulting from crime or terrorism, which might otherwise happen, do not do so. They are not on a different side regarding whether or not people should or could be prosecuted successfully. As I say, the legal matter and that of potential damage to the effectiveness of protection cannot really be judged by outsiders. I am certainly an outsider these days. I was a bit of an insider a decade and a half ago when I was a security Minister in Northern Ireland and dealt with these matters, but whatever I was at that point, time and technical progress certainly make me an outsider now. My provisional opinion is that we should consider very carefully the views of those involved in the intelligence world.
	My other point concerns the vehicle of a Private Member's Bill. It is certainly an unusual vehicle. We shall no doubt discuss the issue again on other occasions. The noble Lord, Lord Goodhart, has promised to discuss the matter next week when we debate the Terrorism Bill. I am sure that on that occasion we shall discuss the measure in terms of the terrorist connection. There is a problem with Lords' Private Member's Bills generally. They are virtually always sterile anyway. I have to be careful not to criticise Commons' procedure. However, it is a fact that no Private Member's Bill starting in the Lords can succeed unless there is not a single word of discussion on it in another place. It is most unsatisfactory that any Bill should pass into law without a word of discussion in the elected House. However, that is an issue between the two Houses which would repay examination and is to a certain degree incidental to today's debate. The purpose of the noble and learned Lord, Lord Lloyd of Berwick, in proposing a Private Member's Bill is to get it into a special Select Committee. However, as has been pointed out, notably by the noble Baroness, Lady Taylor, it has already been considered—and can, indeed, be considered again in the wider context—by the Select Committee of another place. Therefore, we should hesitate before setting up such a committee. In any case that is a matter which will in due course come before the Liaison Committee if it is to be pursued.
	The whole issue of the use of intercept evidence is a matter that we have debated before. It is clearly a matter that we shall debate again, and it is a matter of importance. However, it is not one that we should rush into. It is a much more technical and deeper matter than it first appears. I await the Minister's reply with the greatest interest.

Lord Bassam of Brighton: My Lords, the noble and learned Lord, Lord Lloyd of Berwick, has made a valuable contribution to the debate on whether the law should be changed to lift the current ban on intercept evidence. He entered into that debate with his customary charm and with his usual thoughtful, intelligent and probative approach. The Bill is clearly drafted and is clear in its intent. We are under no illusions on where it wishes to take us.
	We have had a very valuable debate, not least because it has given many people with much more experience than I have in this field the opportunity to examine the issues and bring forward their ideas and thinking in a way which we perhaps do not usually have in your Lordships' House. As the noble Lord, Lord Cope, said, the Second Reading of a Private Member's Bill is an unusual way in which to engender this debate and the considerations around it. To reflect momentarily on one of the other contributions, the noble and learned Lord, Lord Lyell, called for a whole-picture approach to the issue. Perhaps with all the different and various contributions we have had from Members with different backgrounds and experience, we have had a whole-picture approach to the issue.
	Before I turn to the exquisite merits of the Bill, I remind your Lordships of the Government's stance and make that absolutely clear and transparent. The Government set out their position in a parliamentary Written Statement on 26 January 2005. My right honourable friend the Home Secretary stated then that, following the most thorough and wide-ranging review ever undertaken, the Government decided that the risks of change outweighed the benefits. Intercept, as we know, is extensively used in the United Kingdom as an intelligence tool and its use has consistently delivered very good results against serious crime and terrorism. There is no evidence that these results are bettered elsewhere in the world. Set against that, the review concluded that evidential use of intercept material would be likely to help secure only a modest increase in convictions of some serious criminals, but not the most serious and not terrorists.
	The Home Secretary expanded on two areas of particular risk: the need to safeguard the unique co-operation between the intelligence and law enforcement agencies by protecting from disclosure their sensitive capabilities and techniques, and the need to understand the impact that new technology will have on the interception landscape. That has already been referred to in the exchange about the views of Sir Swinton Thomas, who I think made very clear that the forthcoming changes in technology in a sense make the proposed Bill sterile. That was a very potent point made by the interception commissioner. If a way could be found safely to use intercept as evidence without jeopardising this productive relationship, without resulting in an excessive resource burden on the intercepting agencies, and in a way that would stand the test of time and would be compatible with our responsibilities under the ECHR, then we would support such a measure. In a sense the point made by the Prime Minister on which the noble and learned Lord, Lord Lloyd, drew, is evidence of that. If those requirements could be met, who would not want to go along that route?
	Unfortunately, the experience of 12 years of almost constant review, as has been referred to by many contributors to the debate, has shown that successive governments of both major parties have been unable to find a way of achieving that. Nor, with due respect to the noble and learned Lord, Lord Lloyd, has he. For the Bill that he has set out would on the face of it not appear to guarantee the safeguards necessary to protect that important relationship—a relationship which has drawn expressions of admiration and support in your Lordships' House today—between the intelligence and law enforcement agencies. That would lead to a reduction in co-operation, a reduction in the options available to criminal investigation and a reduction in its effectiveness as an intelligence—and ultimately as an evidential—tool. Increased reliance on public interest immunity alone could not provide the degree of assurance sought.
	Crucially, the Bill does not take into account technology change. The Government are at this moment working with the communications industry in order to understand and respond effectively to technology change and to examine any evidential opportunities that that might offer. But one thing is certain. The communications and interception world in just a few years' time will be radically different, as we have heard this morning, from the one we are looking at now, let alone the position when the noble and learned Lord was more actively engaged in the subject in his previous role as Interception of Communications Commissioner.
	The changes will be felt in the United Kingdom ahead of most of the rest of the world, but they will occur globally in the next decade, and the signs are that the United Kingdom is well ahead in preparing for them. That is in no small part due to the uniquely close co-operation in the United Kingdom between the intelligence agencies and law enforcement bodies, but also to the similarly close relationship we have established with the communications service provider industry. The additional work that has been commissioned on this subject will be completed by the end of the year and in the Government's view it would be premature to try to pre-empt any conclusions that might be drawn from that. Suffice it to say for now that the introduction of new technologies will raise by several notches the protections that are required to protect interception techniques and capabilities in the future.
	A number of questions were raised in the debate which I should deal with in conclusion. The noble and learned Lord, Lord Lloyd, in particular asked about the value of utility in this matter. We take the view that, because of the terrorists' skill, it is extremely important for us to protect intercept facilities. Terrorists go to great lengths to avoid detection and intercept provides the enforcement agencies and those involved in the security of our nation with a very important tool. The noble and learned Lord, I think, referred to the Australian example of handling intercept material. There have been recent reports from Australia of five terrorist court cases in which intercept material was used but no convictions were obtained. That is felt to be due partly to the way in which key information was revealed. There have also been recent media reports of difficulties in using intercept evidence in terrorist cases in both Spain and Italy.
	The noble Lord, Lord Goodhart, proposed guaranteeing the anonymity of employees used in intercept work and offered that as a form of safeguard. We take the view that guaranteeing anonymity in court of those employed in intercept work by service providers would not protect the degree of co-operation, assistance levels or the important relationship that is developed between the service providers and those in the intelligence service. So we do not necessarily see that as a particular benefit in arguing the case for the Bill, as the noble and learned Lord did.
	Those are important points to consider. The noble Baroness, Lady Ramsay, made them forcefully, as did the noble Baroness, Lady Park, both of whom have long experience. I think that it is that experience to which we should listen most in this debate. We are in difficult times, times in which our security and safety in this country is very much in peril. When someone with the experience of the noble Baroness, Lady Ramsay, in this matter says that—and I paraphrase—to change from our current position would endanger very sophisticated techniques and pose unacceptable risks, then, in view of her 20 years' experience in dealing with these issues, I take such views very seriously. Nevertheless, this is a very important debate and one certainly does not wish to deny its validity. It is a debate that, outside the confines of the Second Reading of this Private Member's Bill, I have no doubt will be actively pursued.
	During the course of the debate, the issue of referring the matter to a Select Committee has been raised. Here I am drawn to conclude, in agreement with the noble Baroness, Lady Taylor, that the Intelligence and Security Committee has done a great job in examining such issues in the past, and I do not see why it should not do that job in the future. Like the noble Lord, Lord Cope, I have severe doubts about whether it would be appropriate for a Select Committee of your Lordships' House to look at those matters in the same way, given the significant national security interests involved.
	For all of the reasons that I have drawn upon and for many of the reasons advanced during the course of the debate, I am obviously going to conclude on behalf of the Government that we cannot support the noble and learned Lord's Bill, although convention is that the Bill receives its Second Reading in your Lordships' House. The Bill would be unlikely to secure a safe and sustainable way of using intercept evidence in the United Kingdom. While, like other noble Lords, I welcome the opportunity that the Bill has provided for us to have a debate in a constructive way this afternoon, ultimately the Government cannot support the Bill.

Lord Lloyd of Berwick: My Lords, I am grateful to all noble Lords who have taken part in the debate, which has now lasted two and a half hours. I am not surprised to find that those who have spent their lives in the intelligence world have spoken against the Bill with such conviction and even passion—that is what I expected. However, I think I am right in saying that only the noble Baroness, Lady Ramsay, and possibly the Minister, have spoken against this matter being referred to a Select Committee. That is all I am asking. The importance of the matter is not in doubt, and the importance of it being investigated, if possible, by Parliament has been stressed and stressed well by the noble Lords, Lord Brennan and Lord Judd, and the noble and learned Lord, Lord Lyell.

Lord Robertson of Port Ellen: My Lords, I should make it absolutely clear, since perhaps it was not clear from my speech, that I also oppose the matter being referred to a Select Committee. My noble friend Lady Taylor also made it clear in her speech that she opposed it, so silence should not necessarily be taken as consent.

Lord Lloyd of Berwick: My Lords, I am grateful; I had forgotten that the noble Lord, Lord Robertson, spoke against the Select Committee. I was coming to the noble Baroness, Lady Taylor. I understood her to say that she was not against the investigation of this matter by a Select Committee, but she suggested that a more appropriate committee would be the one of which she has been a member, namely the Intelligence and Security Committee.

Baroness Taylor of Bolton: My Lords, I am grateful to the noble Lord for giving way. It would be duplication and in effect a waste of time to have a Select Committee when the Intelligence and Security Committee already has members who have some experience of this matter. It operates within the ring of secrecy and therefore could take evidence. The ISC is the body to which we as parliamentarians should look, because it is a statutory body of parliamentarians charged specifically with oversight of the agencies.

Lord Lloyd of Berwick: My Lords, I fully understand that, and the committee is in charge of the agencies, but the problem is that perhaps its members are not as familiar as they might be with the realm of the criminal justice system. The point about having a Select Committee of this House is that it would be able to combine the expertise of those in the intelligence world, the police world and the criminal justice world. That is why I suggest that it is the way ahead.
	The noble Lord, Lord Robertson, accepted that there was what he called a "superficial" attraction in the Bill because it would enable some serious criminals to be convicted. I agree that it would do that, and that is now common ground, but I cannot regard that as a "superficial" matter. Even if one terrorist could be charged and convicted before he had committed his terrorist act, thereby saving lives, surely that would be worth doing. We could do that if intercept evidence were admissible because there is seldom any other evidence which would enable him to be charged before he acted.
	Of course we must be careful to protect the sophisticated techniques about which we all know, and, above all, we must be careful to protect human lives, as the noble Baroness, Lady Park, stressed. But there are ways in which that could be done and I believe that those ways should be investigated by a Select Committee, which is the purpose of the Bill.
	As for the suggestion that such legislation is a waste of time because in two years' time everything will have changed, I hardly regard that as a suitable reason for not investigating the matter now. With that, I leave the matter to your Lordships.
	On Question, Bill read a second time.

Criminal Defence Service (Funding) (Amendment) Order 2005

Lord Goodhart: rose to move, That an humble Address be presented to Her Majesty praying that the order, laid before the House on 21 September, be annulled (S.I. 2005/2621) [9th Report from the Merits Committee].

Lord Goodhart: My Lords, it is clear from the response to the Question asked by the noble Lord, Lord Clinton-Davis, on Wednesday that the protection of the earnings of lawyers is not exactly a popular cause, particularly perhaps on the government Benches. However, in moving this Motion, we are not making what I might describe as a trade union case for the benefit of lawyers; we do not see fees as a sacrosanct issue. We accept that the very high cost cases—or VHCCs—are out of control and we agree that it is wholly unacceptable that 1 per cent of cases accounts for 50 per cent of the cost of criminal legal aid.
	We do not object to across-the-board cuts in fees paid to Queen's Counsel, and we have made it clear that we would oppose legislation, which was at one time proposed, to give judges a specific exemption from pension boards. But we are concerned about cuts in fees to the less affluent, and in particular young, lawyers. I am very pleased to see that the noble and learned Lord the Lord Chancellor is here to speak for the Government on this issue and that he has not left it to anyone of lower status.
	The Government made it clear in their Explanatory Memorandum attached to the order that the problem arises from the fact that the DCA is in the course of overspending its funds on criminal legal aid by about £130 million and that it is being forced to find savings. It is also clear that the overspend is due not to the rapacity of defence lawyers but to a number of causes. Those include the increase in the number of possible offences as a result of legislation over the past few years—for example, the annual criminal justice Acts and the annual immigration and asylum Acts; the increased cost of cases as a result of new rules which increase the amount of work, such as the need to argue whether hearsay evidence is admissible; the need to argue whether a previous record should be put in evidence; and the increased requirement of disclosure of documents.
	Most fee rates have in fact been frozen for the past eight years, resulting, on the basis of computations made by the General Council of the Bar, in a reduction in fees over that period in real terms of no less than 24 per cent before we take into account the further cuts. Lawyers now find that their fees are being cut by an additional £28 million a year. The Government regarded dealing with that shortfall as so urgent that the order was brought into force on 3 October, when under the normal rules it should not have been brought into force until 12 October.
	In answering the question put by the noble Lord, Lord Clinton-Davis, the noble and learned Lord, in his initial answer, referred only to the intent to reduce the costs of the VHCCs. That is, of course, not the whole truth. The order reduces the fees payable in VHCCs, but it goes far beyond that. In particular, it cuts fees in graduated fee cases—that is the medium-length criminal trials—as well. I do not propose to go into the details of the order, which is exceedingly technical and very detailed, but it is clear what has happened. The fees for some cases have not been altered—for example, the fees for junior counsel in trials lasting up to 10 days—but some have been altered very substantially. That is so for barristers dealing with cases that last from 11 to 40 days which are the graduated fee cases.
	Considering the cases where no QC is instructed—cases that are most likely to involve younger barristers—according to tables produced by the General Council of the Bar, for some 25-day cases, for example, fees may be reduced by as much as 50 per cent; for 26 to 40-day cases the daily fees are reduced depending on the type of case by amounts ranging from £280 to £400 per day. Those are massive cuts. The figures before the cuts were made—let us say £20,000 for a 25-day, five-week trial—look, at first glance, high, but the graduated fund cases involve a great deal of preliminary work, paid at a lower rate or not paid at all. Barristers' fees are not all income; some 20 to 25 per cent goes on rent, travel and other expenses; and barristers do not step from one 25-day case to another. On many days, they are not in court at all or they deal with shorter and less well paid matters.
	Young lawyers are, of course, paying off debts incurred such as university tuition fees and fees for vocational training. Notoriously, the first few years in practice are, as they always have been, very difficult for many. I doubt whether young lawyers, dependent on criminal legal aid, are doing nearly as well as young general practitioners. The cuts have led to such discontent that in October there was even a tentative attempt at a strike which fizzled out. A barristers' strike is not something that we on these Benches would encourage or glorify, but it is not surprising that there was great disquiet. Most members of the criminal Bar are, in effect, public servants. What other public servants would have had large cuts imposed on them after eight years of a pay freeze and, if such cuts were made, what would be their reaction? I believe that there is a real danger that able young law students will avoid criminal work altogether and if they go into it, they will leave for better paid sections of the legal profession or will leave the profession altogether.
	About three weeks ago, Vera Baird, a Queen's Counsel and a Member of the House of Commons, and someone for whom I have a very high regard indeed, made a very powerful speech in a Westminster Hall debate which she introduced on the subject of criminal legal aid. Some of the points that I have already made were borrowed from her speech. As she said in that debate, she comes from a modest background, and she is concerned to ensure that the Bar, which was her branch of the profession, will continue to be open to people such as her. The cuts will make it more difficult for young lawyers with no money behind them to survive. The Government should listen. Some people say that defence lawyers are there in order to get guilty people off. That is, of course, not true. They are there to ensure that people charged with crimes get a fair trial. That is the principle that lies at the heart of the legal system. These cuts threaten that principle, if not today, plainly in the longer term.
	As I told the Government some time ago, it is not my intention to press the Motion to annul the order. It is only in very special cases that your Lordships' House should annul an order, and I do not see this case as falling within that band. But I instigated this debate because this order is damaging. It raises important issues that should not pass without debate. I hope that when, in due course, the Government receive the Carter report, they will reconsider the cuts in fees and will find other, less damaging, ways in which to recoup their overspend.
	Moved, That an humble Address be presented to Her Majesty praying that the Order laid before the House on 21 September be annulled (S.I. 2005/2621) [9th Report from the Merits Committee].—(Lord Goodhart.)

Lord Cope of Berkeley: My Lords, this is clearly a long-running saga in which I hesitate to intervene, but I am stepping in on behalf of my noble friend Lord Kingsland. This part of the saga was supposed to be covered by the May review, but it never appeared. It seems to have been suppressed. It has certainly been overtaken by the new review by the noble Lord, Lord Carter, which is ongoing. But the Government have not waited for Carter review to be completed; they have simply suppressed the earlier review and plunged in with this order.
	During Starred Questions on Wednesday, the noble and learned Lord the Lord Chancellor—who I am glad to see in his place today—said that the problem was that the amount of money had gone up a lot. He said that over eight years it had gone up from £750 million to £1.2 billion a year. He also said that the money was going to the wrong people—those were not his actual words but that is what they amounted to—to practitioners in big cases, rather than those in small cases. He did not spell out how the difference between £750 million and £1.2 billion had come about, and £450 million over eight years is a lot of money. Clearly, some of it is inflation, and some of it is presumably the increased complexity of cases, which therefore take longer, as the noble Lord, Lord Goodhart, mentioned. Some of it, no doubt, is the amount of money going to big cases. It would help the House to understand the noble and learned Lord's point—that the money is going to the wrong people—if we knew the breakdown of where the extra money has gone over the past eight years. I understand that there was not time to do that in Starred Questions, which move quickly, but thanks to the noble Lord, Lord Goodhart, we now have a little more time to investigate the matter and hear about it.
	The other question that arises is whether the order before us does what the noble and learned Lord the Lord Chancellor says it does; that is, whether it diverts money from large practitioners in big cases to those involved at the bottom end of the scale. I must say that, on looking at the order, complicated as it is—I entirely agree with the noble Lord, Lord Goodhart, about that—I cannot see that that is what it actually does. It certainly seems to penalise, to some degree, the small-time practitioners as well as those at the other end. On the other hand, it is a modest measure. The overspend is said to be £130 million per year. I am not quite sure what that is measured against. Whereas the savings claimed from this order are £20 million per year, which is quite a lot less than that. So there is a considerable increase in the amount that is going to be spent on all this over the next year or two.
	I was interested that at the end of the order it says that no regulatory impact assessment has been produced because there is no effect on costs for businesses. But barristers and solicitors are in business, and it certainly affects their income and the way in which they conduct their business. Of course it is the impact on solicitors' and barristers' business, and whether they are going to continue to undertake this criminal defence type of work, which is crucial. It is suggested by the Bar Council, the Law Society, the noble Lord, Lord Goodhart, and so on, that it will seriously affect the future business of lawyers concerned in this way. That is a matter that should worry us.
	I certainly think and hope that the issue will be crucial to the report from the noble Lord, Lord Carter. That is where, assuming this order goes through—and the noble Lord, Lord Goodhart, has made it clear that it will—the next stage in this saga will appear. We need to know from the noble Lord, Lord Carter, in his report whether in his opinion, having been able to go into the complex matter very carefully, barristers and solicitors will still be able to undertake this work on a reasonable basis without their incomes being not only frozen, as they have been for eight years, but suffering from other cuts, either from inflation or from deliberate acts in orders such as this.

Lord Falconer of Thoroton: My Lords, I very much welcome the noble Lord, Lord Goodhart, giving us the opportunity to have a short debate on what I agree with him is a very important measure. I welcome the noble Lord's involvement; he has been a persistent advocate on behalf of Access to Justice over a long period of time. I also welcome very much the involvement of the noble Lord, Lord Cope, although not a lawyer. I do not know why I say "although not a lawyer"—particularly because he is not a lawyer he brings a welcome new perspective to this issue.
	Perhaps I may put the position into perspective. I, like the noble Lord, Lord Goodhart, am a strong supporter of an independent Bar. The crucial areas in which there needs to be an independent Bar are where people cannot afford representation themselves. So, state-funded work is of great importance.
	So far as concerns the criminal Bar, the absence of proper representation leads to miscarriages of justice; and it would be accepted beyond argument that in any criminal case of significance a person is entitled to proper representation in court. That is the underlying basis on which we look at the issues of criminal legal aid.
	As regards criminal legal aid in general—before coming to the points made by the noble Lord, Lord Cope—since 1997, the amount of money going to criminal legal aid has risen by £450 million. A significant proportion of that has gone to advocates in higher court, which means Crown Court cases, which means, primarily, the Bar.
	I am very concerned at what the noble Lord says; that, despite the increases in the amount of money overall going to the Bar, the Bar regards itself as in danger of not getting adequate people at the bottom because of people not coming to the Bar any more. The only way to ensure that is for a proper distribution of that money. Everybody agrees that too much of that money is going to the top, by which I mean going to a small number of cases, which means a small number of barristers. In order to remedy that, there needs to be better distribution.
	I should say, however, that I do not regard it as only the Government's obligation to ensure that that happens. The Bar itself plainly has an obligation to ensure proper arrangements for new entrants at the bottom. The noble Lord, Lord Goodhart, will know as well as I do that many sets of chambers make arrangements for guaranteed fees or payments for people who start at the Bar, which is an extraordinarily good way to ensure that there is an attractive entrance point. That is possible in the context of the earnings of the Bar overall from criminal legal aid having risen substantially during the period that I have referred to. So the overall picture is of criminal legal aid to the Bar rising. Everyone agrees that the distribution is wrong.
	The second point with which I should deal is that there has been a pay freeze during that period. I would like to know, but I do not have the information, what are the average earnings of typical members of the criminal Bar. Yes, particular rates have been frozen, but the average position of a barrister is not known. I think that we would find that some barristers' rates have been frozen over a long period, but equally, the earnings of significant numbers of criminal barristers have risen. No information is available as to what is the distribution. It is wrong to suggest, as the noble Lord, Lord Goodhart, did that with the exception of a handful of people who handle very high cost cases, everyone else's earnings have been frozen. That is not the position. We need to focus on how earnings are affected in determining value for money and fair remuneration. Indeed, it is suggested that there is quite a steep rise in the earnings of barristers at the criminal Bar until medium to senior junior level, at which there is a plateau and that it is the plateau that is causing difficulty. That needs further investigation.
	Without boring the House, let me describe what the order does. It does two separate things. First, as the noble Lord, Lord Goodhart, accurately said, it deals with the £130 million overspend, not by seeking to reduce costs by £130 million this year but seeking only £7 million of that.

Lord Goodhart: My Lords, this is perhaps a small point, but the figure of £28 million that I cited was given in the Explanatory Memorandum. The figure of £7 million is because it is for only part of a year; it will be £20 million next year because some of the work will no doubt have begun under the old arrangements and will presumably continue to be paid under them.

Lord Falconer of Thoroton: My Lords, there are two separate things. The first is, as it were, the emergency package to deal with the £130 million overspend—although I make clear that it addresses only a proportion of the £130 million. The four things done there are: reducing QCs' rates in very high cost contract cases and in one to 10-day graduated fee cases; reducing the rates in 11 to 40-day graduated fee scheme cases for both QCs and juniors; reducing senior solicitor rates in very high cost contract cases; and removing the possibility of an uplift to the prescribed solicitor rates for some offences and, for the remaining offences, restricting the uplift to 100 per cent. Those four things were designed to target the very high cost cases, using that phrase in a non-technical sense to mean cases at the expensive end of the spectrum, which would be very high cost contract cases with a capital 'v' but also high cost cases with a small 'h' and a small 'c'.
	We proposed those changes on 5 July and told the Bar and solicitors that we would consult them and if they thought that there was a better way to target them at the expensive end of the market, we would happily amend the proposals, but within the same financial envelope. Ultimately, both the Bar and the solicitors did not advance any other proposals. Indeed, the position of the Bar was exemplified by a letter dated 26 July 2005 to an official in my department from Mr Andrew Hall. It states:
	"The leadership of the Bar is not prepared to assist the Department in imposing unjustified cuts on the profession".
	It retained that position throughout. There were discussions but ultimately no alternative proposal was formally put.
	The other category of cuts includes cases known as cracks and guiltys. The cracks and guiltys scheme involves moving cases where there is a "guilty" plea or those listed as a "not guilty" plea that turn out to be a "guilty" plea at or before trial. There is a move from assessment after the event on an hourly basis of what the barrister should be paid to something akin to a graduated fee scheme. That saves the balance of the money. That has been discussed in detail with the Bar from last year through to the beginning of this year. It is separate from the arrangements to deal with the £130 million overspend to which the noble Lord, Lord Goodhart, referred.
	All that was done before the noble Lord, Lord Carter of Coles, reported because with the first category of cuts we were in considerable financial difficulty but it was agreed last year that the changes to the second category of cuts would be made last autumn or as soon thereafter as possible. They are both explicable. The critical issue is that we deal with the lack of control in legal aid generally coming from very high cost cases. It is swallowing not just legal aid for normal criminal cases but also civil legal aid. So although there has been an increase in criminal legal aid over the past few years, there has been a decrease in civil legal aid. Since 1997, criminal legal aid costs have risen by 37 per cent while civil legal aid costs, excluding asylum, have fallen by 24 per cent. We must address that just as much as the prices paid for more ordinary criminal cases. We cannot continue to deal with the matter piecemeal as we have done year on year for the past eight or nine years, myself included as Lord Chancellor. We need an authoritative look, particularly at criminal legal aid, that gets the confidence of the professions and ensures an independent Bar and fair remuneration for solicitors. That is why I have appointed the noble Lord, Lord Carter of Coles.
	In the middle of last year, I promised that there would be a review of the graduated fee scheme and the very high cost cases scheme. The noble Lord, Lord Carter, must review those as part of his bigger review. Although I promised it by May this year, it was not set up until July. I regret that, but there has been no failure to deliver a review. It is now part of a much wider review.
	The noble Lord, Lord Cope, is absolutely right that there has been a £450 million increase in criminal legal aid since 1997. He is also right that three reasons for the increase are inflation, increased complexity and a small increase in the number of cases dealt with. But a significant part of it—20 per cent or more—is simply an increase in rates. I will give the detailed figures to the noble Lord, Lord Cope, in a letter and I will put that letter in the Library of the House. There is no regulatory impact assessment in the order because the only figure that one would include would be the amount saved. We think that that is sufficient.
	I am grateful for the opportunity to make those points. Legal aid, particularly in criminal cases, is a big problem. I very much hope that the proposals of the noble Lord, Lord Carter of Coles, will command respect right around the profession, and that this House will have the opportunity to debate them as soon as possible after he has delivered his report, which must be before 31 January 2006. I invite the House, in those circumstances, to accept the order.

Lord Goodhart: My Lords, I am very grateful to the noble and learned Lord the Lord Chancellor for his reply and for explaining in some detail—much more than it was possible to do last Wednesday—the reasoning behind his proposal. Of course, I am entirely convinced that it is his wish, as well as mine, to see a flourishing legal profession. But the noble and learned Lord has not removed my concerns about the order. He raised the point of criminal legal aid eating into civil legal aid, which many of us have been aware of for a long time. Indeed, it was raised in your Lordships' House on several occasions. It is our view that criminal legal aid, which is demand-led because it is essential that people who are charged with criminal offences must have proper representation, should be ring-fenced. Civil legal aid should have a regular amount. It should not be cut because of increases in criminal legal aid. Civil legal aid is essential for ordinary people's access to justice. We believe that increases in criminal legal aid should be borne out of general taxation rather than at the cost of civil legal aid.
	However, there is no doubt that the total level of criminal legal aid spending has increased substantially, but a large proportion has been siphoned off into those very high cost cases. The position is quite different for the ordinary criminal law barrister who does routine work and not the complex fraud and other cases that eat up so much money. There is no doubt that individual barristers' earnings have gone up as he or she progresses, but that is natural progression for barristers during their careers. They start at a low level of earnings and progress higher.
	I recognise that a number of chambers provide guaranteed income for new barristers, but that is not a substitute for paying proper fees. Indeed, cuts in fees may make it more difficult for chambers to finance that kind of guarantee. So I remain seriously concerned that this order—which quite plainly cuts fees, as is admitted on all sides, by what will be £28 million—will have a significant and damaging effect on the future of the criminal bar. For the reasons that I gave earlier, it is not my intention to press this Motion. I therefore beg leave to withdraw it.

Motion, by leave, withdrawn.

Estate Agents (Independent Redress Scheme) Bill [HL]

Lord Dubs: My Lords, I beg to move that this Bill be now read a second time.
	At the outset, I should declare an interest. I am just about to sell a house and buy another, which should be made clear before I develop the argument about this Bill. There are an estimated 1.5 million residential property transactions each year. The total value involved is estimated at £232 billion. Buying or selling a property is the biggest financial transaction that many of us have to face. Yet it is highly stressful and buyers and sellers often feel very vulnerable when they embark on that process.
	The Estate Agents (Independent Redress Scheme) Bill will make a simple amendment to the Estate Agents Act 1979 to require all estate agents, whether they are members of a trade body or not, to sign up to an independent complaints procedure. It means that all home movers will be able to access redress without having to resort to court—a point which is very important. Obviously, going to court is open to people now, but it is a cumbersome, expensive process. Surely, we need something simpler and better than that.
	This will be a mandatory registration scheme, and any estate agent who behaves really unprofessionally would not be able to practise if he is found guilty of such unprofessional conduct. I should say now that I am grateful for the help and advice I have received in preparing this Bill, in particular the staff at Which?, who have gone out of their way to provide me with both support and information.
	While it is true that from 2007 every house put up for sale will need a home information pack, and a complaints system will be set up to cover this aspect of the buying and selling process—but only this aspect—my Bill would go much further because it is intended to cover all residential purchases and sales. It is interesting and amusing to consider which groups are the least trusted in Britain. Research published not long ago in the Daily Telegraph showed that estate agents are trusted by 16 per cent of the population. Red-top tabloid journalists are trusted by 14 per cent, while politicians rate slightly higher at 20 per cent, rising to 40 per cent depending on party—I shall not say which—and whether the politician is a Minister or the local MP. Let us face it: we politicians are not very popular, journalists are not popular and neither are estate agents. It is clear that we have to find a way forward from this difficulty, at least with regard to estate agents.
	During the passage of the Housing Bill through this House in 2004, the Government pledged to bring forward proposals that would extend the scope of independent redress schemes for those who have cause to make a complaint against an estate agent, but nothing seems to have happened. I refer to an OFT report published in March 2004 which set out a number of recommendations for reforming the industry. In particular it recommended that a statutory redress mechanism should be set up if the industry could not deliver improvements through voluntary codes of practice. The consumer group Which? did not believe that the report went far enough, and nor do I. The industry was given two and a half years to sort itself out. It has failed to do so, even though many in the profession want to improve its image. I shall refer to people in the estate agent industry later in my remarks. Furthermore, the OFT's latest plan for 2005–06 identifies the housing market, including estate agents, as a priority theme.
	It is interesting to note that the Government broadly endorsed the report from the OFT. Perhaps I may mention briefly how they responded to the proposals. One government response stated that a consultation document would be published on how the OFT proposals could be brought into effect, and to see what more could be done to strengthen the regulation of estate agents. So far as I know, that document has yet to materialise. The Government also said that they would use the Housing Act to provide a redress mechanism. They have confined themselves to the proposals as regards home information packs, to which I have already referred. They have not yet found parliamentary time for any further legislation in this area.
	A third suggestion was to work with stakeholders to develop methods to evaluate trends in consumer detriment in this market, along with making the case for an industry qualification and national quality standards for estate agents. I am not aware of any proposals to take this forward. Finally, the Government response stated that they would consult on amendments to the legislation, including measures to make estate agents' dealings with consumers more transparent, and to give the OFT and local trading standards departments further tools to tackle unfair practices and better protect consumers. Again, neither I nor the staff at Which? are aware of any such consultation.
	It is perfectly clear that consumer confidence in any profession must depend on maintaining very high professional standards. That is agreed by estate agents and of course it applies to professionals generally. I turn now to the Ombudsman for Estate Agents. That organisation does provide some redress, but membership is not compulsory and therefore a large number of estate agents do not adhere to the scheme. In any case, anyone disciplined under it is not debarred from practising as an estate agent. By that I mean serious disciplinary measures. So there is no way of preventing anyone either becoming an estate agent or remaining in business as one even if they do not meet any professional standards.
	Currently the level of consumer dissatisfaction with estate agents is very high. I shall not take the time of the House by repeating the many statistics, but it is estimated that in 2004 some 5,500 complaints were brought before the Ombudsman for Estate Agents.
	In addition, probably about 5,000 other people complain to local trading standards officers about the service they receive from estate agents. So, if we assume that there are some 24,000 people employed in estate agencies in the UK, and if we combine the two sets of figures that I have quoted, this represents almost one complaint for every two estate agents—a very high level of complaint.
	The problems faced by consumers cover a wide range of what I call unprofessional behaviour. These include misdescription of property, although that is illegal; providing false information, such as saying that there is planning permission when there is not; financial losses to buyers through charging commission fees when they are not due or colluding with property developers; not informing a buyer whose offer has been accepted that the property has been put back on the market; pressurising a vendor to sell and to accept a lower offer so that someone who is possibly in collusion with the estate agent can buy it; and discrimination through not passing on an offer because a buyer has decided not to use the estate agent's mortgage services. There are examples documented of all these practices. It is clearly unacceptable that consumers should be badly treated in such a way and have limited redress as at present.
	Research shows that fewer than half of those who had bought or sold a home were always happy with the services they received from estate agents. Experiences included 29 per cent who said they were not kept well informed during the process; 14 per cent who said the estate agent incorrectly described the property; and 12 per cent who said that the estate agent had put too much pressure on them. There was little difference in these figures between the experiences of buyers and sellers. All of these practices could lead to financial loss, as well as making an already stressful process even more so. Clearly this is not a desirable situation.
	But some estate agents in the industry have high professional standards. I have had conversations with and received briefings from the National Association of Estate Agents. It has some 10,000 members and probably covers about half the estate agents in Britain. I very much welcome the support it has given to the Bill. Other professional bodies in this area also support the Bill but I do not have that sufficiently well confirmed to be able to quote them.
	The NAEA maintains that it should be a mandatory requirement for anyone practising as an estate agent to belong to an organisation which has minimum entry standards, codes of conduct and a disciplinary system. That is also the aim of the Bill. It is ludicrous that I could set up as an estate agent tomorrow. I have no experience at all, I would not know how to do things properly, and yet there is nothing to stop me doing it.
	The NAEA was very helpful to me and gave me some advice. It advised me that my Bill should be extended to include lettings because there are also quite a number of complaints about rented property, not only purchased property. It clearly is not desirable to ask the House to support the Second Reading of a Bill while saying that I want to add something to it. On the other hand, there are so many precedents of governments of both parties introducing Bills and then introducing many amendments to them that I shall not be too embarrassed about doing so. I believe the House will accept that in good faith.
	The NAEA also advised me that if any of its members act unprofessionally they could in extreme cases be expelled, but that that would not stop the estate agent from continuing to practise. The NAEA also believes that agents should be regulated in a way similar to other bodies that operate in the house buying and selling process. There is regulation in regard to financial advisers, people advised in conveyancing and people involved in surveys—and yet the estate agents themselves are not regulated. That is surely a gap in protection for the consumer.
	If the Bill were to become law, millions of people would be better protected than they are at present. It is a modest but sensible step forward which I hope the Government will look upon sympathetically. I commend the Bill to the House.
	Moved, That the Bill be now read a second time.—(Lord Dubs.)

Baroness Byford: My Lords, it is a great pleasure to follow the noble Lord, Lord Dubs, who has brought an important Bill before the House. I shared his disappointment when I saw that the Government had not picked it up and run with it earlier when they were dealing with the Housing Bill. I shall not go over all the ground covered by the noble Lord, who has gone through it very clearly. I, too, have received a good briefing from Which? and the National Association of Estate Agents, for which I am grateful.
	I have a couple of specific questions for both the noble Lord and the Minister. The noble Lord said that the NAEA suggested that the Bill should cover lettings, which is probably sensible.
	Under proposed Section 27A(1):
	"The Secretary of State may by order require an estate agent to be a member of an independent consumer redress scheme".
	The provision only says "may". What happens if the estate agent does not wish to belong to such a scheme? I am not an expert in these matters by any means, but I cannot see what the counter-balance would be if the estate agent did not want to be involved. The noble Lord is proposing a scheme that he hopes will be desirable and to which people will feel that they should belong, but what will happen if they do not?
	The noble Lord mentioned home improvement packs, a subject that I have raised in the House on several occasions. I do not know whether the noble Lord or the Government—my dilemma is who to ask—have ever thought about how long those packs will be valid for. Will they be valid for six months or a year, or will certain parts have to be updated during that period? Might that have implications for what the Bill is trying to achieve? I am trying to be constructive, not destructive, because this is a very good Bill.
	I understand that at present if people consider there has been wrongdoing or they have not been dealt with properly by the estate agent, they appeal to a trading standards officer. Does the noble Lord view his scheme as taking a quicker and less expensive route or as having tighter controls and outcomes? I address that question to the Minister as well.
	In paragraph 7 of its briefing, the National Association of Estate Agents admitted that only 40 per cent of its members are members of the ombudsman scheme for estate agents. How realistic is the proposed scheme and how does the noble Lord anticipate getting full support for it? Having said that, I agree with the noble Lord that buying and selling a house is, apart from getting married, one of the most fraught times in one's life. I am not suggesting that marriages go wrong although, sadly, some do. But buying a house involves an enormous amount of capital and is a long-term commitment for many people.
	It is in all our interests to come up with schemes which help people and make things simpler for them, particularly in cases where they are wrongly advised. The noble Lord was right to highlight the fact that sometimes they are not given the right information at the time, nor told of offers made. I suspect that it is difficult to prove but there are ways of doing it.
	Lastly, why did the Government not include the new scheme in the previous Bill? Have they conducted more research since then that ties in with what the noble Lord, Lord Dubs, is trying to do? I thank the noble Lord for explaining the measure fully. I am sorry that my comments are brief, but he covered the issue well. I hope that my few questions might help him in advancing his Bill.

Lord Addington: My Lords, this Bill should have happened a long time ago. When we think about what is involved, it is painfully obvious that something should have been done. As I have said before, I have recently been through the process of buying and selling houses. The process can be fraught and there is an odd relationship with the person who is marketing and professionally representing you at the same time.
	There are also stereotypes that must be lived with—"well appointed" might mean that the walls may stand up only if the wind is not in the wrong direction and other such jokes. Only lawyers have more jokes against them than estate agents. One reason for opposing the Bill could be that we may be improving the status of one of the few professions that is held in lower public esteem than us—it is the only one that I can see at the moment. However, we should really have acted a long time ago. If the professional bodies within the industry are encouraging the Government, action should be taken.
	The Bill in front of us seems to be a good vehicle. If it is amended and expanded, that may be to the good. However, if this is not the right way forward, I hope that the Government will assure us that something else will happen shortly. I cannot see why we should wait. The only thing that would tempt me to smile on any process of waiting would be to hear that the measure would be guaranteed to get government time. If not, this Bill should have the full backing of the Government and Parliament.
	The most attractive proposal is in Clause 1, which states:
	"The Secretary of State may by order require an estate agent to be a member of an independent consumer redress scheme".
	I believe—I trust that this is correct—that that makes the proposal effectively compulsory and that people will know that; they will know the way forward. The noble Lord, Lord Dubs, nods his head. That means that people know where to go and what to do. They know where to make complaints.
	I was probably less anti-estate agent before last night when I tried to cross at a pedestrian crossing and was nearly run down by a Foxton's decorated Mini as it came through a red light, but we will leave that to one side.
	Other complaints can be made in the process. For example, where do we complain when we discover, as I did, that we were not receiving the interest on a deposit on the house that we were buying? We had to chase hard to get it, because it was not offered. That is a comparatively small complaint, but there are others in the Bill. If people know where they can get an immediate response, they will feel more comfortable. The industry itself will respond more quickly because it cannot use the ultimate stalling tactic of going to the lawyers. Everything will be easier if we have something like this Bill in place. I hope that the Government will support the Bill. If they do not, they had better have a good reason and a timetable for a new proposal.

Lord McKenzie of Luton: My Lords, I am sure that we are all grateful to the noble Lord, Lord Dubs, for his full and helpful explanation of this measure, the Estate Agents (Independent Redress Scheme) Bill. The noble Lord's Bill raises important issues about how we should provide consumers with redress when they suffer at the hands of estate agents, and how we can improve and extend the provisions on redress in the Housing Act 2004.
	Let me say at the outset that the Government welcome the principles of the Bill and I am pleased to see that that is shared throughout the House. I am glad to have the opportunity to explain to your Lordships the Government's approach to these issues. It may be helpful for me to begin by going over the background to these issues, some of which the noble Lord also alluded to.
	In March 2004, the Office of Fair Trading issued a report on the estate agency market in England and Wales. The OFT report found that there was significant consumer dissatisfaction with estate agency services, which ranged from suffering serious abuse such as failure to pass on offers to concern about quality of service issues, such as poor administration by estate agents. The noble Lord, Lord Dubs, spoke strongly on that point.
	Estate agents have a key role in the housing market, and a hugely significant one. For most people, buying a house is the most expensive purchase they ever make, and sometimes the most stressful, for both buyers and sellers. It is vital that the market works well and that consumers are adequately protected against unfair practices.
	As regards consumer redress, the OFT recommended that more estate agents should subscribe to voluntary codes of practice, which provide redress for consumers and set service standards over and above the legal minimum. Because of the risk that that exhortation might not be heeded, the OFT recommended that the Government should take a power to require estate agents to belong to independent industry redress schemes. In their response to the OFT report in July 2004, the Government said that they intended to go further than the OFT's recommendations. We said that we would seek to take powers in the Housing Bill, which was then before Parliament, to enable the Secretary of State to approve one or more estate agent redress schemes and to require estate agents to belong to one. Some noble Lords referred to that earlier.
	As some noble Lords may recall, there was considerable support in your Lordships' House for that policy. There was also strong support for the view that the provisions in the then Housing Bill should allow a redress scheme to cover any relevant acts or omissions of an estate agent. Indeed that was the Government's view. However—and this is the point that the noble Baroness, Lady Byford, impressed on me—the House authorities ruled that the scope of the Housing Bill was not wide enough to enable redress schemes to cover general complaints about estate agents. A redress scheme under the Bill would need to be confined to complaints about estate agent services linked to the provision of a home information pack. So the Housing Act 2004 does contain provisions enabling the Secretary of State to approve redress schemes and to require estate agents in England and Wales to belong to one, but the scope of such schemes is much narrower than we had originally intended. Moreover, as we have always recognised, the Bill could not make corresponding provision for Scotland and Northern Ireland. The Housing Bill covered only England and Wales. Further legislation was therefore always contemplated.
	As the Government have therefore made clear, we would need further legislation to cover not only Scotland and Northern Ireland but also, following the decision over the scope of the Housing Bill, to enable estate agents redress schemes to address a wider range of complaints by consumers over the service provided by their estate agents. The Bill proposed by the noble Lord seeks to implement those changes. In effect, the Bill would repeal the Housing Act provisions and insert corresponding provisions into the Estate Agents Act 1979, but with the two important changes to the scope that we wish to see. The Bill is very similar to the one introduced in another place in the previous Session by the right honourable Alan Williams MP, which ran out of time before the election. As noble Lords know, the Government offered a handout Bill for this Session to achieve our intentions in that area, but no Member in another place was persuaded to take it up.
	I therefore fully support, on behalf of the Government, what the noble Lord is trying to achieve, which is the same as what the Government want to achieve. Those objectives are also shared by consumer groups and by many estate agents themselves and their representative bodies. Compulsory membership of redress schemes will improve standards of service and provide a cost-effective means of redress for consumers. That is necessary to overcome significant consumer dissatisfaction with estate agency services, which was brought out in the Office of Fair Trading report.
	Consumer access to independent redress in this sector is currently limited, with only around 40 per cent or so of estate agents belonging to the existing ombudsman for estate agents scheme. That means that many consumers who are dissatisfied by the response of an estate agent to their complaint only have the option of seeking redress through the courts, which can be difficult and costly, as noble Lords have recognised. The Government believe that all consumers buying and selling residential property in the UK should have access to a redress scheme to enable their complaints about estate agency services to be investigated and determined by an independent adjudicator. The availability of a free, independent and efficient redress scheme would be important to consumers in this vital market.
	Indeed, so supportive are we of what the noble Lord is trying to achieve that I assure your Lordships that we fully intend to bring forward government legislation, when parliamentary time permits, to implement these shared objectives. The noble Lord will ask, reasonably enough, when that may be. I can only say that it will not be in this Session. The Government will set out their procedures for the next Session in the usual time. I cannot anticipate the Queen's Speech. However, I can assure noble Lords that we fully recognise the importance of legislation on this issue.
	Your Lordships may ask why, then, we cannot give full support to this Bill. It is not as simple as that. The Government have their own programme for this Session. We and another place already have much business to get through. It is hard to see how the Bill could be enacted in this Session, given other pressures on time. Moreover, although the changes we wish to make to the provisions in the Housing Act may seem simple on the surface, achieving them is not as straightforward as it may seem. It is rather more complicated than simply seeking to transpose the provisions of the Housing Act to the Estate Agents Act 1979. The noble Baroness, Lady Byford, raised the point about sanctions if someone was not prepared to enter a redress scheme; indeed, that is one of the defective points in the current drafting of the Bill that would have to be catered for in full legislation.
	It was also asked whether the redress scheme could cover lettings. The Estate Agents Act 1979 does not do so. A case would have to be made for regulating lettings with regard to regulatory principles, and a proper cost/benefit analysis would need to be undertaken. That would be a matter for the ODPM.
	My noble friend Lord Dubs raised the question of what is happening on the consultation document that was promised. The Government have been considering the drafting of this document, but we have been considering carefully a number of legal points that arise over how the OFT proposals can be given legal effect. These matters are moving forward.
	I hope that will reassure noble Lords. We support the thrust of the Bill, but we must be neutral on it, as we cannot offer government support to ease its passage through both Houses. I hope, however, that your Lordships are reassured by what I have said about the Government's commitment to bringing forward their own legislation in due course.

Lord Dubs: My Lords, I am grateful to all noble Lords who took part in this debate. There may have been few speakers, but I think the contributions were helpful and positive from both the Conservative and Liberal Democrat Benches. I will talk about the Government's contribution in a minute.
	I will deal with one or two of the points that have been made. It is intended that the scheme will be mandatory. Once the scheme or schemes are in being, it will be an obligation on all estate agents to be members, otherwise they will not be able to operate as estate agents. I am not sure I should chance my luck on trying to do some legal interpretation of the wording now, but the point is that there could be independent consumer redress schemes that were not satisfactory or to the proper standards, and it would be up to the Secretary of State whether a scheme met such a standard before he required all estate agents to be members of it. It is certainly my intention, however, that under the legislation it should be mandatory for estate agents to be members of such a scheme. That is an answer to both the Front Benches opposite.
	The problem of having a limited redress scheme as regards the home information pack proposals is that this will be confusing for consumers. People will say, "Well, we can complain, but only on a limited aspect of the purchase transaction". That does not help. When people fall foul of any particular system they like to know, in an open and transparent manner, what their redress is. I fear that, although the Government's motives are good as regards HIPs, and I think it is a welcome step forward, there is a confusing element in having a redress scheme for only a limited part of the house purchase process.
	I was also asked about trading standards officers. They perform a useful job but they cover a wide range of goods and services. I seek a specialised service which will cover estate agents. The officers concerned will therefore understand the estate agency business and will be able to develop codes of conduct to establish what is appropriate professional behaviour on the part of estate agents. I hope that will result in a quicker procedure. It would also debar from working estate agents who do not behave professionally and who behave badly. Despite all the good work that trading standards officers do, I understand that they do not have the powers that I mentioned. For that reason I would prefer the scheme I am discussing to be adopted although I accept that trading standards officers do a good job covering a wide range of goods and services. However, the help that they can offer is more limited in the area that I am discussing.
	I welcome the Government's support for the principles underlying the Bill. This Bill is very similar to that introduced by Alan Williams MP, but he did not secure any time for that Bill to be debated and therefore could not evoke the government response which today's debate has elicited. Accepting the principle is fine. The Minister said that the Government intended to take action, but not in this Session. However, many Sessions will follow this one. I very much hope that the Government will consider that this is an urgent matter. Any measure that commands such popular support—I believe that this measure will command popular support—constitutes a win-win situation for the Government. Not all government legislation is necessarily as popular as this measure would be. The Government have every incentive to bring such a measure forward. It is in their interests, but particularly in the interests of house buyers and sellers, to do so.
	As regards letting, I understand the technical difficulty that the original legislation—the Estate Agents Act 1979—did not cover lettings and that it might be difficult to amend this Bill sufficiently to include them. However, there is a problem with lettings. Many people are very upset at the way they are treated by estate agents when they seek to rent a property. Therefore, I put it to the Government that the matter is worth considering seriously. However, this Bill may become law before the Government consider that matter. We shall see what progress is made.
	I thank noble Lords for the support that they have given the Bill. I shall watch with interest its further progress through this House. It may well become law and save the Government much bother in the next Session.
	On Question, Bill read a second time.

Veterinary Surgery (Testing for Tuberculosis in Bovines) Order 2005

Baroness Byford: rose to move, That an humble Address be presented to Her Majesty praying that the order, laid before the House on 25 July, be annulled (S.I. 2005/2015) [8th Report from the Merits Committee].

Baroness Byford: My Lords, I am sorry that the measure was not included in the Minute. The reason for bringing this measure before the House is underlined by the fact that the Merits of Statutory Instruments Committee has drawn this and the following measure on the Order Paper to the attention of the House. The committee states:
	"We question whether the pilot programme, which will deploy only non-veterinarians drawn from the State Veterinary Service, will offer an adequate basis for assessing the wider use of 'lay testers'".
	I have several questions for the noble Baroness, Lady Farrington. The Explanatory Notes clearly acknowledge the fact that the use of non-veterinarians for testing purposes is a very sensitive issue for the profession. However, the NFU supports the measure as its members are as well aware as anyone, including vets, that it is undesirable to have a backlog of tests.
	I understand that about three years ago, after the foot and mouth epidemic, the statistics in regard to the late running of lay testing were challenged and that British cattle vets undertook a survey. The survey showed that 3,000 tests were waiting to be done. However, the results also showed that some of the parties surveyed did not exist or had given up farming, or that the TB test had been completed but had not been signed off by the SVS office because of staff shortages. So before we talk about the details, will the Minister confirm how many tests are outstanding and say whether she is confident that the situation of three years ago is no longer true and the figures apply? It is an enormously important point.
	The noble Baroness will also be well aware, because she has been spokesman on this topic for some time, of the Government's desire to see greater working in the farming community and improved animal healthcare. The most important way of achieving that is by the proper use of veterinary surgeons. At this stage I should perhaps declare an interest, as I am sure others will shortly, as an associate member of the BVA. It does an amazing job. Vets may well be called to a farm to respond to a specific problem that may be nothing to do with lay testing, but while on the farm notice that other matters are not quite as they should be. Their expertise is greatly valued. One of the BVA's big worries is that lay testing will jeopardise that close link. The Government should consider that very seriously.
	On the financial side, the vets will be paid for lay testing. However, if it is done by non-qualified people, that income will not go to practices which otherwise would have received it. As I am sure the noble Baroness will realise, there is still a question mark over the viability of large animal practices. The small practices are not the worry; it is the large ones. Every time one of those practices disappears or loses a partner or a vet, the response time and the mileage covered is increased and the service is closer to being jeopardised. If there are fewer such practices and they have to cover a wider area, it is likely that their fees also will increase. It presents a no-win situation. The Government are pushing on the one hand to try to improve animal health and welfare, but on the other, really through default, they may be jeopardising the very objective they are trying to achieve.
	The order deals with setting up the test programme, which we are told will last 12 months and involve about 1,100 tests. Will that number be broken down into a certain number of farms in certain areas? How do the Government propose to define their "test area"? That information would be helpful to the House. Will the information gained in doing the tests and from any observations made on the farm on a given day be passed back to the local vet who normally provides veterinarian services to the farm, or will that vital information be lost? That issue has not been addressed at all.
	Finally, I turn to paragraph 34 of the Merits of Statutory Instruments Committee report, which states:
	"We note that in 2003 DEFRA's initial proposals for lay testing was met with extensive disagreement on the part of the profession (46 out of 88 responses).
	It then goes on to say that it recognises that Defra has responded by deciding to conduct the pilot programme before deploying lay testers more widely. However, we are not clear that the pilot programme as planned will necessarily produce the sort of evidence needed to meet some of the concerns expressed, and I would be glad for clarification on that point. This statutory instrument raises important issues about the way the department views the value of vets per se and how it will establish and maintain that vital link in keeping the health and welfare of animals on the farm in its main criteria for future welfare. I beg to move.
	Moved, That an humble Address be presented to Her Majesty praying that the Order, laid before the House on 25 July, be annulled (S.I. 2005/2015). [8th Report from the Merits Committee]—(Baroness Byford.)

Lord Addington: My Lords, coming as I am rather new and nervously to the field, the arguments that have been put forward by the noble Baroness have a certain degree of weight. If you are going to allow some highly-specialised people onto farms to do one particular function, the general power to observe the well-being of the animal is almost bound to decrease and things will be missed.
	Also, as the noble Baroness pointed out, we have an area where we are short of vets. We are effectively taking away a revenue stream from them, and the laws of supply and demand may mean that it cuts down the number of vets further by cutting down the revenue streams, which means that those vets that remain can charge more. That also means that people will delay longer in calling in a vet and will let certain situations go on longer. That may cause more infectious disease, more distress to the animal and higher degrees of infection.
	The fact of the matter is that it is something of an emergency, stop-gap measure. An indication from the Government of exactly how much of an emergency measure it is would be helpful. Also, are they planning to expand the numbers of state vets? I am informed that the numbers have fallen in recent years. If the Government can give us some assurances that they do not look on this as a long-term solution and they are merely doing it to make up the lost time and the backlog, there might be a grudging acceptance from us. If, however, it is seen to be a general fix of getting people in to do one specific task that might be opened up to the entire veterinary profession, then we would have much more of a problem with it. I look forward to the Minister's reassuring answer.

Lord Soulsby of Swaffham Prior: My Lords, I welcome the prayer to annul the Motion put forward by my noble friend Lady Byford. I declare an interest in that I am a veterinary surgeon and I was president of the Royal College of Veterinary Surgeons a few years ago. It is also likely that I am the only person in this House who has even performed a tuberculin test on an animal.
	As a young veterinary surgeon, I, along with many of my colleagues, performed innumerable tests on dairy cattle in all weathers; a boring and at times dangerous task, especially with cattle loose in yards. We did it to rid the country of the scourge of tuberculosis and to remove the source of human infection, especially for children; although pasteurisation helped in that too. We were very nearly successful. With the exception of a small focus of infection in the south-west, the country was rid of that awful disease. Farmers welcomed it because they could become TT-tested dairy herds and thereby gain a premium on their milk, or they could become attested, which allowed them to sell their cattle in special markets, also with a premium.
	In 1941, TB was found in badgers, but I shall not go into the subsequent problems associated with that.
	There is an urgent need for the widespread testing of cattle now, as there was many years ago, and this order provides for lay personnel, after training, to undertake the procedure. As the noble Baroness said, there is great concern that this important diagnostic procedure is to be undertaken by lay personnel. The argument put forward is that it is not difficult to train a person to inject a small quantity of tuberculin intradermally and to measure the reaction that occurs 72 hours later.
	But there is more to it than that. While conducting a herd test, a veterinary surgeon cannot but observe the general health status of the herd and often he gives advice on the situation—all at no cost to the animal owner. Many veterinary surgeons know the phenomenon of farmers saying, "By the way, while you're here, would you like to have a look at this or can I ask your advice on that?". No lay tester can respond to questions such as that. It is all done free and gratis and is regarded by a veterinary surgeon undertaking a herd tuberculin test as part of the expected procedure. Lay personnel cannot be expected to respond in such a way.
	Whatever the measures that need to be taken to curb the spread of TB in cattle, the use of lay testers for what is regarded by the profession as an act of veterinary surgery is not the way ahead. Veterinary surgeons must take a pivotal role in the surveillance, diagnosis, control and eradication of bovine tuberculosis. Their advice to farmers and stock owners is important and, in the long run, their presence on farms is essential to improve the health status of the national herd.

Lord Kimball: My Lords, I declare an interest. I am an honorary member of the Royal College of Veterinary Surgeons after serving for nine years as a Privy Council Representative at the Royal College as a Member of another place. For 10 years, I was chairman of the University of Cambridge Veterinary School Trust when my noble friend Lord Soulsby was dean of that school, and we raised sufficient money to keep the trust in being. I also happened to live near Melton Mowbray and the Remount Depot, where many of the graduates from Cambridge end up in the Royal Army Veterinary Corps. In fact, today, Cambridge University trains so many successful vets that they are lecturing in all the other colleges throughout the United Kingdom.
	When you are visiting a farm, the dogs at Melton Mowbray or the horse lines, you need a trained veterinarian who knows the subject in its complete environment. That is very important. It is not just a question of reading the thickness of the skin in one single TB test; one wants to know how the animal is kept and the extent of the farmer's interest in the proper control of disease.
	Today, we have a special problem with large animal practices. Vets are called in in the case of cows, bullocks and horses and, sometimes, when the problem is serious, they are called in to look at a very valuable ram. But you cannot afford to call in a vet to look at a ewe, although you might if an illness is affecting the whole flock. Today, we face a real danger from the fact that vets are not getting on to farms. When we had an outbreak of foot and mouth, vets became a precious commodity and we had to call in many from abroad to help us.
	We cannot allow large animal practices to become any smaller, and this experiment—I know it is only a very limited experiment—will withdraw vets from farm practices, which is a serious matter. As my noble friend Lord Soulsby said, that would never have happened if the Government had faced up to the fact that we should have had a proper cull of badgers. In the summer, one only has to drive down a country road early in the morning to find a large number of dead badgers. Thank goodness they are dead; we want more of them dead. There is an explosion in the badger population and when they become overpopulated they succumb to disease—TB—which spreads to cattle. This order is an experiment—an unnecessary experiment—and I hope the Government will not go ahead with it. It distances vets from farms and it means that the Government are not facing up to where tuberculosis comes from and are not dealing with the badgers.

Baroness Farrington of Ribbleton: My Lords, I thank the noble Baroness, Lady Byford, for giving us the opportunity to air this issue in your Lordships' House. As the noble Baroness recognised, the possible introduction of lay TB testing is not new. It has been discussed, off and on, for at least the past 30 years. The issue provides a number of concerns for the veterinary profession, as the noble Lord, Lord Soulsby, is aware. The order represents a very cautious first step towards finding a resolution that meets many of the concerns expressed by noble Lords. We are all aware of the serious impact that bovine TB is having on our cattle industry. It is one of the biggest animal health threats that we face in the country, and as the noble Lord, Lord Kimball, said, it is a very important issue.
	Since the foot and mouth outbreak, we have gradually reduced the significant backlog of outstanding tests. The noble Baroness asks for the exact number outstanding. On 30 September, the number was 2,049. However, one of the key lessons learned from the foot and mouth outbreak was the need to be prepared and to plan ahead. We can be certain that the demand for TB tests will increase in response to the continuing spread of the disease and in anticipation of the introduction of compulsory pre-movement testing, which is likely to mean several hundred thousand additional tests being required.
	The profession tells us that rural practices are struggling to provide veterinary services in many parts of the country and yet, at the same time, they seem confident that vets will be able to meet the increasing demand in TB testing. We are not convinced that we can wait and see. We note that that concern, as was recognised by the noble Baroness, Lady Byford, is one shared, expressed and voiced in consultations with the NFU.
	In July 2003, we published a consultation document which invited comments on proposals to permit properly trained and competent non-veterinarians to perform TB skin testing of cattle. Having successfully completed an approved course, lay testers would work alongside and under the direct and continuous supervision of a veterinary surgeon until such time as the vet was satisfied that the trainee had reached proficiency in the technical aspects of TB testing. A veterinary surgeon would also check the test results and interpret them.
	We reassured the veterinary profession that there would be no compulsion on veterinary practices to employ lay testers. If individual practices decide not to employ lay testers, that is a matter for them. However, other practices may well see that as an opportunity, rather than a threat, and seek to involve well trained technicians under the direction of a veterinary surgeon. Smaller practices, in particular, may find this option attractive.
	Having listened to the concerns raised on behalf of the profession, we sought to establish a better evidence base to clarify whether well trained lay testers could indeed carry out the test. We decided on a carefully controlled pilot, using experienced field staff within the State Veterinary Service. We worked closely with the Royal College of Veterinary Surgeons and the British Veterinary Association to explain the aims of the pilot and to show them how the State Veterinary Service is proposing to train and supervise their staff. Both organisations sent observers to the training courses and were complimentary about what they saw. Both organisations have also been invited to monitor the pilot, and to help analyse the results. The value of using State Veterinary Service staff for the pilot is that when and if lay testing is rolled out to the private sector, it is likely that the State Veterinary Service will have a key role in training lay testers. Through the pilot, it will have the opportunity to assess the suitability of its current training programme from the view of the trainer and of the trainee.
	Part of the culture change that the veterinary profession needs to embrace is a preparedness to build closer relationships with other farm service providers. There must be benefits in greater co-operation between vets and para-professionals. We recognise that the profession is going through significant changes and faces some difficult challenges. We formed a working group with the RCVS and BVA specifically to address these issues together on a partnership basis. I am sure that the noble Baroness and the noble Lord, Lord Soulsby, will welcome that. There may be some limited interventions that we can make to help rural veterinary practice meet the challenges that it faces.
	In response to another concern, we do not expect the introduction of lay testers to have a detrimental impact on veterinary surveillance. I recognise the reference made by the noble Lord to, "While you're on the farm, could you just have a look at . . . ". It is true that the need to carry out a TB test provides the veterinary surgeon with an opportunity for a farm visit that may not otherwise take place. However, it is unusual for significant findings to be brought to our attention as a result of a routine TB test. Veterinary surgeons themselves have developed the art of not spending the whole of their day doing work as a follow up to, "While you're here, could you just . . . ". If there is a need for veterinary attention or advice, it is ultimately up to the owner to arrange for it. It would be dangerous to rely on infrequent visits for TB testing for the detection of most important animal health or welfare issues.
	Were this order to be annulled, it would mean that the pilot could not continue. That would represent a lost opportunity, and undermine our attempts to ensure that farmers are able to have their animals tested for TB without delay. On previous occasions in your Lordships' House, there have been references to a need to tackle the backlog. No decisions on the possible extension of lay testing will be taken until the results of the pilot are known. If we decide to proceed with lay TB testing, the current order would need to be amended and there would be further consultation with interested parties.
	There are issues that we can revisit after the pilot has been completed. However, we hope that representatives of the veterinary profession will recognise that ensuring the viability of rural veterinary practice may require it to adopt new ways of working and to enter into new partnerships. To reassure the noble Lord, Lord Soulsby, we hope that lay testing will free vets to do work that uses their higher skills and their ability to charge at a rate to allow rural practices to survive.
	The noble Baroness, Lady Byford, asked about the test area and test information being passed back to local practice. We are looking at 10 of the main areas of the country where TB is most prevalent. In State Veterinary Service offices results will be shared with local practices, and the local vet will be fully involved in looking at the results of the lay test and information being passed back to the local practices. I think that will cover some of the concerns raised by the noble Lords, Lord Kimball and Lord Soulsby.
	The option to employ lay testers is a matter to be left to individual practices. I say to the noble Lord, Lord Addington, that it is not a short-term fix; it is about releasing vets to use the skills that I referred to.
	The noble Baroness raised the issue of the merits committee's report. The State Veterinary Service will be involved in training lay testers if the principle is extended. The TB test involves the interpretation of results. The injecting, reading and recording of results is a technical matter. They do not require professional judgment. The professional judgment and diagnostic expertise of a fully trained veterinarian could be delivered by a trained para-professional. The experience of the pilot project is important, and we are very grateful to those professions from all sides that will be involved in the evaluation of the pilot scheme.
	It is extremely important that we work very closely with the profession in seeking to resolve some of these issues. The Animal Health and Welfare Strategy, which we published last year, issued some clear challenges to everyone with an interest in raising the standards of animal health and welfare. One of the key outcomes the strategy seeks to bring about is the understanding and acceptance of roles and responsibilities. It called for a culture change in the way vets operate and a move towards services that customers need and have to pay for.
	The strategy recognised that vets are uniquely placed to help animal owners adapt to their changing responsibilities. We would welcome ideas from the profession on how vets can use their skills to help achieve the aims of the strategy and bring about a culture change, which is needed to ensure that farm veterinary practice has a sustainable future.
	I hope that I have covered all the points raised. I shall of course carefully read Hansard, and I will write to noble Lords covering any outstanding points.

Baroness Byford: I am grateful to the Minister for her response, to which I shall return, and also to the noble Lord, Lord Addington, who, like me, is fielding very heavily on behalf of his party. Perhaps this is not his natural home ground, but we are grateful to him for his support. I am grateful to both my noble friends. My noble friend Lord Kimball has had a long association with the royal college and the long and highly recognised work of my noble friend Lord Soulsby within the veterinary profession is greatly valued.
	I deliberately did not go down the line of talking about bovine TB and controls of TB apropos badgers. I thought I was very calm this morning, but since the noble Baroness has opened the door—

Noble Lords: Oh!

Baroness Byford: No, no, my Lords, the noble Baroness did. I cannot possibly resist the temptation to come back on that. If only the Government could get their act together on the whole question of how we control the spread of bovine TB in our wildlife population as well as within the cattle population, we would not need so many testers long term. That is as much as I will say today, but I must put that on record. I know that the Government have spent a long time considering ways to control bovine TB in wildlife and what is the connection, but the longer that they delay, the worse the situation gets. I cannot not stress that at this moment.
	The noble Baroness talked about para-professionals—another word to add to my veterinary vocabulary. I will be interested to know what the response to that is. If we are to have some super para-professionals who will be moved to do certain things in different ways, where will that stop? But that is for another day.
	I thank the noble Lords who have taken part in the debate. As I said, it is important that we get to grips with the disease and stop it from spreading, whether in wildlife or cattle to cattle. I hope that the Minister will reflect on what I said earlier about my fear that the order will make things more difficult for some in large veterinary practices. I beg leave to withdraw the Motion.

Motion, by leave, withdrawn.

Supply of Relevant Veterinary Medicinal Products Order 2005

Baroness Byford: rose to move, That an humble Address be presented to Her Majesty praying that the order, laid before the House on 7 October, be annulled (S.I. 2005/2751) [11th Report from the Merits Committee].

Baroness Byford: My Lords, it only shows how diverse this topic is that we now have a change of batting order on the Government Benches because, instead of being a Defra veterinary problem, it now becomes a Defra/Department of Trade and Industry problem. I welcome the noble Lord and am grateful that he will respond to the debate.
	Again, I am raising this issue because the Merits Committee brought it to the attention of the House. Its summary stated:
	"This order contains DTI's proposals for increasing competition in the market for the supply of prescription-only medicines for veterinary use. The proposals have been subject to consultation with interested parties, but controversy continues to surround certain elements of them, not least because of concerns expressed by a large number of veterinary surgeons".
	As the noble Lord was in his place while we debated the previous order, I shall not go on at great length about the financial implications, because that is one of the major problems, of which I am sure he is well aware.
	The Explanatory Memorandum states that the order prohibits veterinary surgeons from charging a fee for the issuing of prescriptions for a period of three years. I direct the Minister's attention to paragraph 15 of the Merits Committee report. It states:
	"DTI carried out a consultation process on its proposals from February of this year. The EM states that there were 105 responses, of which the majority (75) came from individual veterinary surgeons. In general, veterinary surgeons and some manufacturers opposed the proposals, while those consumer groups who responded were in broad support".
	Of those 105 responses, 75 were from vets. How many were manufacturers and how many individuals or consumer groups made up the bulk?
	I understand from paragraph 16 of the report that there has been no meeting of minds between the DTI and the veterinary surgeons on the issue. So we know where we stand from the very start. I should like to share with noble Lords the British Veterinary Association's position, on which it has sent us a brief, in case noble Lords have not received it. Veterinary practices have traditionally subsidised the cost of their consultation fees with the income that they receive from the sales of veterinary medicines. If the legislative changes are successful in opening up the market for POMs, it is likely that that practice will have to cease. Inevitably, if that occurs, veterinary surgeons will naturally seek to maintain the same level of income by increasing some of their consultation fees—the Minister is nodding; he must be well aware of that—which will have to be borne by the consumer at the end of the day.
	The veterinary profession feels that there is a lack of transparency in the cost of prescriptions to clients that the new order promotes. The Competition Commission was highly critical of the profession for failing to provide itemised invoices to clients. The profession has risen to that challenge, yet its members now find themselves actively encouraged by the Government to hide those very costs of providing a prescription in their overall consultation fees. We seem to be going round in a rather funny circle. The frustration that that has engendered has been further enhanced by the fact that the cost of providing a prescription will have to be borne by all clients, irrespective of whether they require a prescription or indeed veterinary medicine.
	My concern, as I explained earlier, is obviously for the health and welfare of animals. If, as a result, we see a fall in medicine sales and fewer consultations, that will have the same effect on farm visits as I described. Any reduction in the number of veterinary surgeons with expertise and experience in farm animal medicine could have serious consequences for the biosecurity of the UK's food production in animals. I wish to reply to the Government's original response to the consultation. I quote:
	"The Government also remarks, 'We are sorry that veterinary surgeons see this [measure] as an attack on their professional status, as neither the Competition Commission nor the Government intended it this way'. However"—
	this is the Government's comment—
	"the profession might be forgiven for feeling a little hunted given the way its legitimate concerns have been ignored".
	I am very grateful that the noble Baroness, Lady Farrington, is still here. She will be able to share her thoughts with the Minister because the two departments overlap so clearly. The briefing goes on:
	"Perhaps one of the most revealing comments is made near the beginning of the response where the Government notes that 'the Competition Commission [was asked to look] at the market for veterinary medicines rather than veterinary services'. Throughout, the Government has failed to take account of the wider picture and that, coupled with its seemingly blind adherence to market dogma, has characterised the whole sorry saga from the start".
	I need not add to that, as it is self-explanatory. I beg to move.
	Moved, That an Humble Address be presented to Her Majesty praying that the Order, laid before the House on 7th October, be annulled (S.I. 2005/2751) [11th Report from the Merits Committee].—(Baroness Byford.)

Lord Addington: My Lords, I feel on slightly firmer ground in my second step along this path, for the simple reason that I heard the subject discussed on "Newsnight" several months ago. On that occasion, a vet shrugged his shoulders and said, "If you do not allow us to charge extra on prescribed drugs, we will have to put it somewhere else to keep our profit margins up". That seemed a situation of zero net gain for the consumer, but a bureaucratic process. Larger-scale users of drugs may well benefit from the changes.
	I wish to gain some idea of the Government's thinking. What evidence is there that manufacturers were over-charging? That is the nub of the situation. It has been common currency for a long time among anyone paying even the slightest attention to the issue that certain areas of veterinary practice have been under considerable pressure. If we expect them to keep on functioning and to make their businesses viable, and if the Government do not object to their shifting how they generate their income, should they not have been dealing merely with manufacturers or finding some other way forward there rather than putting vets in the odious position of having to increase the cost of minor, routine surgery on, say, small animals?
	A minor cost may have been the drugs. With a larger animal the same thing would apply, but it might put off the treatment of the animal again. It is clearly a danger, which probably will occur in a few cases. I would be interested to know whether there has been a study into how much effect this will have. It seems that on this occasion the vets are piggy in the middle. The obvious way to ameliorate the downside effect is merely to shove the cost to somewhere else. In an itemised bill, some people may economise in certain areas.

Lord Soulsby of Swaffham Prior: My Lords, again, I thank my noble friend Lady Byford for tabling this Motion. I have declared my interest, so I will not do it again. The Competition Commission's inquiry in 2003, as has been said, concluded that veterinary surgeons had, in effect, a monopoly in the supply of prescription-only medicines—generally known as POMs—for animals. To redress that and to promote competition, the commission recommended that for a period of three years veterinary surgeons should provide prescriptions at no additional cost to the client beyond that of consultation.
	Traditionally, veterinary practice has included income from the sale of veterinary medicines, along with consultations. The two go together. The income part of the advice on veterinary surgeon care to an animal or a flock is important in the whole package. Now the profession is asked to issue prescriptions for free after a clinical examination or a consultation. The animal owner receiving such a free prescription can have it filled elsewhere; for example, at the local chemist, the pharmacist, a feed store or even on the Internet—the latter is quite common.
	It is possible that a pharmacist will carry only high turnover products with a high margin of profit. If that is the case, it is unlikely that the overall cost to the client of a veterinary package—that is, consultation and medicine—will be reduced because he will not be able to get more specialised prescriptions of POMs elsewhere. He may have to go to a supplier who charges much more than a veterinary surgeon who would carry such products.
	Like it or not, there is a cost to veterinary practices for issuing prescriptions. They do not come for free. Veterinary practices are not subsidised, as is the case with the National Health Service. The cost invariably will be incorporated into the consultation fee, which will increase veterinary fees overall. As the noble Baroness pointed out, that is of wider concern, especially in agricultural practices where an increase in fees may deter owners to consult a veterinarian to the detriment of the health and welfare of an animal, flock or herd.
	At the same time, farm animal practice is increasingly precarious, as mentioned by other speakers, and uneconomic. If there is a decline in income, either as a result of a fall in medicinal sales or fewer consultations, it may reduce the number of veterinarians with expertise and experience in farm animal medicine even further. That would be to the detriment of the biosecurity of United Kingdom food production animals and their welfare.
	As a final comment, perhaps I may mention the concern about the proper use of medicines in farm animals. I am particularly concerned about the use of antibiotics and the development of antibiotic resistance. Within the livestock industry and the veterinary profession, a consortium has been developed called RUMA, the Responsible Use of Medicines in Agriculture. Livestock owners and veterinarians have adopted this important and innovative approach to safeguard not only human health, but also animal health by the responsible use of medicines. It originated in concern about the misuse of antibiotics, but now it has spread over a much wider area. I cannot see that the Competition Commission's recommendations sit helpfully with the aims and objectives of RUMA. I hope that, after the three-year trial period, the progress made by the consortium—and I can assure noble Lords that progress is being made on the more responsible use of medicines in livestock—is acknowledged and the order bringing forward a no-charge policy for prescriptions is acted on favourably. I say that because I believe that RUMA will illuminate the way ahead.

Lord Kimball: My Lords, I can add very little to what has been said by my noble friend Lord Soulsby. We have a difficult situation in treating animals. I am thinking particularly of horses. The charge a veterinary surgeon can make will often depend on the fact that some of the charge can be recovered in the prescription he writes. We do not want to reduce the number of calls a veterinary surgeon may make. He may be treating an animal, but the animal does not respond to that treatment because he has got it wrong. He will need to change the treatment.
	I was extremely interested in the "Country File" programme of 7 November, which explained how we can go to Ireland and buy prescriptions at a much reduced cost. If you have a horse that is on Butazolidin, you do not have to go back to your own veterinary surgeon for another prescription. You can go to Ireland, fill your pockets with the drug, and come back and continue the treatment. As with so much in the profession, this is an extremely complicated business. We must proceed with great care.
	I would like to see the order withdrawn at this stage in order to allow us to consider it further, particularly in view of the costs involved.

Lord McKenzie of Luton: My Lords, I start by thanking the noble Baroness, Lady Byford, for giving us the opportunity to discuss this order, the Supply of Relevant Veterinary Medicinal Products Order 2005, laid before Parliament on 7 October. I hope that I can address some of the concerns that have been expressed in the debate.
	Noble Lords will be aware that the order is being made under the Fair Trading Act 1973 in response to a report by the Competition Commission published in April 2003. It will improve competition in the market for certain veterinary medicines that can be dispensed only against a prescription. For a long time, the market for these medicines has not been working well for customers. The measures in the order will give customers the freedom to shop around and will encourage pharmacists to enter the market. Ultimately, this increased competition will be good for both consumers and businesses.
	For several years now, a strong competition regime has been seen as a crucial element of the UK's economic performance. Effective competition is the best way to ensure that consumers get a fair deal. They benefit from lower prices, increased choice and higher quality. Reflecting this, the Competition Act 1998 and the Enterprise Act 2002 strengthened the entire competition regime. As a result the UK is now regarded as having one of the best competition regimes in the world, according to a 2004 peer review carried out by KPMG for the DTI.
	The work of the Competition Commission is thorough and highly regarded. Under the new regime, the commission has the power to implement its own remedies, fully taking politics out of the process. The members of the commission taking decisions are experts drawn from various fields. The commission has shown itself able to draw conclusions which strengthen the protection available to customers and consumers without over-regulating and without ignoring the specific circumstances of particular industries. This is especially important where the decision may have an impact on an organisational group of people with significant lobbying power.
	As has been recognised, the commission report looked at the market for prescription-only veterinary medicines following complaints to Ministers and the OFT about the high price of these medicines. A monopoly reference was made in 2001 under the Fair Trading Act, and although this Act has now been replaced, it remains in force in relation to reports completed under it. As your Lordships can imagine, this is a complex subject involving many levels of the supply chain—manufacturers, wholesalers, veterinary surgeons and alternative suppliers. The commission has obtained significant volumes of information and cost data about a range of specific products.
	The commission also undertook a series of international comparisons to determine whether prices were higher in the UK than elsewhere, and looked at the comparative prices of non-prescription veterinary medicines.
	The findings of the commission were not favourable to the existing regime. It found evidence of three complex monopoly situations involving manufacturers, wholesalers and veterinary surgeons who supply prescription-only veterinary medicines in the UK. Whether or not a particular individual organisation is directly engaged in monopoly conduct—for example, unfair pricing—the combined effect of these situations has been detrimental to the public interest. This has led to a lack of choice of suppliers for animal owners and to medicine prices being higher than they would otherwise have been.
	The first complex monopoly involved veterinary surgeons. Indeed, this has been recognised in contributions from noble Lords today. The commission found that they failed to give clients relevant information about the price of veterinary medicines and the option to take prescriptions. By "taking a prescription" I simply mean taking away a piece of paper to buy the medicine from a pharmacist, as happens in most cases involving human medicines. However, they were also involved in pricing practices that inhibited fair competition. In many cases, prescription-only veterinary medicines are priced in a way that cross-subsidises professional fees—again, a point effectively recognised today. Those veterinary surgeons that do this have to put a significant mark-up on the medicines they sell. This removes their incentive to price competitively or to "shop around" between manufacturers for the best deal. It also creates a perverse environment in which they are less able or willing to pass on any benefits they do get from manufacturers directly to clients.
	In the second and third monopolies, manufacturers and wholesalers were found to be operating in a manner—either actively or passively—that prevented pharmacies from buying prescription-only veterinary medicines competitively.
	The combined result of these activities is a somewhat vicious circle. Clients are not aware of their rights as regards taking a prescription to shop around for veterinary medicines—very few of them do—but, without apparent demand for these products, coupled with higher supply costs, very few pharmacies will see any benefit in taking up shelf space. So those few informed consumers who take a prescription may find that the product they want is unavailable from their local pharmacists. If they have had to pay for a prescription, they may find that the money has been wasted—hardly an incentive even to try.
	A few facts and figures illustrate the scale of the problem. In comparison to other countries, the commission found that the prices of most of the best-selling prescription-only veterinary medicines in the UK were substantially higher than in most European countries studied, and were never lower. On average, ex-VAT prices of medicines in other countries varied from 75 per cent of the UK price in France to 86 per cent of the UK price in the Republic of Ireland. At ex-manufacturer level—the price paid by veterinary surgeons—the difference was even greater. Compared to non-prescription veterinary medicines, mark-ups were on average 20 per cent higher, and only 16 per cent of dog and cat owners were even aware they could ask for a prescription.
	In order to remedy these problems, the commission made a series of recommendations designed to improve the working of the markets involved. Manufacturers should be required to provide much more transparent information about costs to modify the practice whereby a large rebate was paid at the end of the year, but left veterinary surgeons and pharmacists unable to predict the best value price to be charged to clients. Both manufacturers and wholesalers should be prohibited from discriminating between veterinary surgeons and pharmacists. Veterinary surgeons should provide much better information about practice policies, availability of prescriptions and the prices of veterinary medicines. To give clients the confidence to shop around, prescription charges should be abolished for a period of three years.
	The commission also made several recommendations for improvements to the regulatory regime for veterinary medicines, which is operated by Defra. At the time of the report, the regime was subject to discussion at EC level, with wide-ranging changes proposed. These recommendations were also accepted, subject to relevance, once the EC discussions had been concluded, and are now being implemented by Defra.
	The changes proposed by the European Commission had knock-on effects in the UK, not least a widening of the definition of "prescription-only veterinary medicine". To ensure clarity, and following better regulation principles, we have waited until those changes have become law before making this order.
	We have consulted on the provisions we are discussing today, as was alluded to earlier. There were some concerns from manufacturers and wholesalers about the practical application of the order, which have been addressed by certain changes in the final order.
	We recognise that the remedies were unpopular among the veterinary profession for a number of reasons. Nevertheless, in a letter to the Secretary of State of 25 July, the veterinary professional association, the Royal College of Veterinary Surgeons, offered to implement the majority of remedies aimed at veterinary surgeons, for which we are grateful. This has been done through changes to its code of professional conduct, which now requires veterinary surgeons to inform clients upfront about the availability of prescriptions, medicine costs and practice policy as regards repeat prescriptions.
	In the light of those changes, the final order has been heavily slimmed down. It contains the recommendations aimed at manufacturers and wholesalers, and one provision on veterinary surgery that the royal college was unable to implement itself—the moratorium on prescription charges. As such, it does not go in any way beyond the original recommendations but is simply aimed at ensuring that they are fully implemented and customers are given greater freedom to avail themselves of best practice.
	A number of questions were raised in earlier contributions, and I shall deal with them as fully as I can. The noble Baroness, Lady Byford, asked about the consultation, and the composition of consumer groups which responded. I do not have the exact numbers to hand but it is in the order of 10 manufacturers, five direct consumer groups and five to 10 animal representatives such as dog trusts and so on.
	Reference was made to the BVA's position and the fact that that could lead to higher charges. The thrust of the order is to ensure that through the availability of prescription charges without hurdle, real pressure is put on ex-factory prices. All other things being equal, the composition or nature of the charges may change but the overall impact should ultimately be to lower prices for consumers, and that is what this is about.
	As the costs of dealing with prescriptions can be recharged but not for three years under a specific charge, so they are effectively likely to be racked up in other components of the charge, it is right that that component for that period reflects a lack of transparency. But that needs to be seen in the context of the wider transparency that the order, and the related implementation via the code of conduct, will bring into effect.
	On the impact on the profession, the suggestion that to proceed on the basis of a continual cross-subsidisation and lack of transparency as a means of defending and promoting the profession seems misplaced. It is very important that components of the charge and the true value of the services that have been provided are properly reflected in the charges. That is why bills are itemised. In circumstances where the true cost of a consultancy is effectively being masked because a profit on a medicine can be marked up and netted off against it does not seem to be helpful, neither is it helpful within the profession because not all veterinary surgeons follow that practice to the same extent as others. Therefore, it discriminates against those who seek to be more transparent.
	I can give one example. I recently became aware of a veterinary surgeon who believed that he was charging a 65 per cent mark-up on the manufacturer's list price for a particular medicine. On receiving the price list in due course, which is what this order required, he was surprised to discover that he had actually been charging nearer to 450 per cent mark-up on the price that he was actually paying because of the way that discounts flow back into the system. That is not a sustainable basis on which to proceed.
	The issue of the impact of changes generally on veterinary practices was debated a little earlier in relation to the other order, but it is an overreaction to suggest that allowing veterinary practices to continue cross-subsidising veterinary fees and overcharging on medicines is in some way essential to maintaining practice viability. Indeed, a change by veterinary surgeons to a more flexible and customer-based service can actually strengthen practices, particularly rural practices. Increasingly, the vet can be seen as the head of a team of farm service providers.
	The noble Lord, Lord Addington, asked why we could not just deal with the manufacturers. The way to get to the manufacturers is to ensure that, through the availability of prescription charges, pressure can be put on them to price more competitively. It is not fair to say that veterinary surgeons are piggy in the middle on this matter. They are an integral part of the problems that exist at the moment on these pricing structures. It is right that that is changed for this three-year period.
	The noble Lord, Lord Soulsby, raised a point that was covered by the BVA about what happens if pharmacists and others only stock the high turnover types of medicines. If that is what happens, at least that will be reflected in the changed market circumstances. The rest would still pertain as it is. In relation to rumour about the responsible use of medicines, to have a system where one cross-subsidises and there is no incentive to reduce the costs of medicinal products—certainly the price at which they are charged—helps less than a transparent system where the price of a medicine is driven down by these processes. That is transparent and people know what the costs are. There is a risk, although I do not suggest that the practice is widespread, that people have no disincentive to prescribe medicine. That is a clear conclusion from the current arrangements, which persist.
	The noble Lord, Lord Kimball, talked about the withdrawal of prescription charges. Other noble Lords have recognised that that does not mean that a charge cannot be made for the work involved, but simply that it is reflected in other components of fees charged. That is acknowledged to have some impact on the transparency in the short term, but this measure is for a three-year period and we believe that this is vital to kickstart the thrust of the emphasis that needs to be given to private competition in these markets to make sure that there are long-term benefits for veterinary practitioners and their customers as well as owners and their animals.
	This order should be widely supported by the House and I hope that I have dealt with questions fully. If not, I will certainly seek to follow them up in writing. I hope that the noble Baroness will now feel able to withdraw her Motion.

Baroness Byford: My Lords, I almost feel tempted to put the matter to a vote, but I will not do that—the noble Baroness's eyes just hit the deck. Quite clearly, there is a problem. Our party of all parties has always been keen on competition, so this Motion must seem slightly strange—the Minister did not draw that to my attention, so I draw it to his. But the whole question is that I do not know whether we are necessarily comparing like with like—and I shall return to that point.
	The point made by the noble Lord, Lord Addington, about his concerns that treatment might be put off is very valid. I accept that vets are "piggy in the middle" in that regard; I am more than happy with that.
	The noble Lord, Lord Soulsby, touched on several very important issues and particularly referred to the work of RUMA. I should like to return to that because, in human health—as we all know when we are suffering from a cold—one does not get a prescription for an antibiotic very easily at all these days from our doctor; indeed, it is the same with vets. There is a real issue about prescribing drugs too freely, that then animals whether human, bovine or of whatever sort, builds up a resistance. That is a worrying problem. I know that it is only a trial, but it is something that the Government should keep well in mind when it goes ahead, because it is a very valid point.
	The point that my noble friend made that you can get prescriptions, or will be able to get them, from anywhere, and particularly from the Internet, is something else that the Government should bear in mind. Some Internet sales on other products—although I am not suggesting that it is the case with the products that we are discussing—have been quite questionable. The need to ensure that the product being sold is the product that is supposed to be sold and that it is up to the standard that should be sold is something that the Government should be aware of—and I hope that they are.
	The noble Lord, Lord Kimball, raised an important issue. Having had horses—and my last one unfortunately ended up on Bute—I know that it is easy to go across the water and come back with cheaper prescriptions over there. In fact, the use is more extravagant perhaps than if the drugs were prescribed and the animals were looked after by a veterinary surgeon. That is another important issue that the Government need to address.
	On the breakdown of my questions earlier, if the Minister could tell me specifically who responded—the person and the name of the group—I would be grateful. The Minister alluded to the fact that he felt that the measures should reduce the question of the price overall. Yes, I believe that in pure commercial terms, he is right that it will; but I suspect that for the consumer who normally uses a veterinary practice, it may well not do so, because prices will have to be raised in other ways, be it through consultation or whatever, to maintain their practice.

Lord McKenzie of Luton: My Lords, if one component of the charge goes up but another component of the cost of medicines goes down, especially if it goes down at ex-factory level, does that not support the view that overall consumers are likely to be better, not worse off?

Baroness Byford: My Lords, I am no expert, and I think I shall wait and see. I accept the noble Lord's logic, but in practice I am not sure necessarily that that logic will prove him right. I hope that it does, because we are here for the interests of everybody.
	Finally, I turn to a couple of things that the Minister said. He said that the Competition Commission was asked to look at the matter and quoted figures that in England the costs of medicines are much higher, but did the Competition Commission take the same relevant brief of charges that were made in practices overseas, or was it just of the medicines themselves? The Minister need not answer that now; I am quite happy for him to write to me, because he may want to seek advice on that. In other words, are we comparing like with like, or are we comparing the costs of medicine rather than of the overall service?

Lord McKenzie of Luton: My Lords, it is not going to be helpful to have a dialogue over this, and I shall write and confirm, but my understanding is that the reference was to the medicines. The purpose of the exercise was to discover just in relation to those products how we compared internationally.

Baroness Byford: My Lords, if that is the case, there may not be a fair pro quo; that is what I am trying to suggest. I do not expect the Minister to tell me today, but if he could write and confirm that and perhaps to give examples of how the costing goes overseas compared with how our costing has gone in this country, with regard to what we are talking about, that would be enormously helpful. I am sure that the BVA and the RCVS would be pleased to have it.
	The Minister also said that not many veterinary practices shop around. I am not a veterinary practising person, but I am surprised, as I would have thought that they did shop around and try to get good prices for the products that they use—but I shall not take him to task on that. However, tempted though I am, bearing in mind the time, I must thank all noble Lords who have taken part in today's important debate. It reflects the intricacies between the various aspects of providing important healthcare for animals, and also that I still believe there is a slight jeopardy of some of those standards slipping because of the steps that have been taken with these statutory instruments. I thank both the Ministers who responded today, and beg leave to withdraw the Motion.

Motion, by leave, withdrawn.
	House adjourned at five minutes before four o'clock.